i 


HUGO    STINNES 


HUGO    STINNES 

By 
HERMANN  BRINCKMEYER 


TRANSLATED  FROM  THE  GERMAN  BY 

ALFRED     B.    KUTTNER 


NEW  YORK 

B.   W.   HUEBSCH,   Inc. 

MCMXXI 


Copyright,  1921,  bt 
B.  W.  HuEBscH,  Inc. 
Printed  in  U.  S.  A. 


•    «■ 
«  •/  »  •    • 

»      r        •        r  » 


CONTENTS 

CHAP.  '^^I? 

INTRODUCTION VÜ 

I.   THE    PERSONALITY   OF   HUGO   STINNES         .  I 

II.    HIS   ANCESTORS I4 

III.   HIS   FIRST   ENTERPRISES 29 

■    IV.    HIS    PART   IN   THE   WORLD   WAR   ....  $0 
V.   THE    MINING    TRUST:      THE     RHINE-ELBE- 
UNION         56 

VI.   THE     ELECTRO-MINING    TRUST:    THE     SIE- 
MENS -  RHINE  -  ELBE  -  SCHUCKERT  - 

UNION 64 

VII.    STINNES*  AFFILIATIONS   IN   GERMANY  AND 

ABROAD 83 

VIII.    STINNES   AND   THE   NEWSPAPERS        .      .      .  I02 

IX.    STINNES    IN   THE    PUBLIC    EYE       ....  IO9 
X.    STINNES      AND      THE      SOCIALIZATION      OF 

INDUSTRIES 127 

XI.  THE  SIGNIFICANCE  OF  STINNES  IN  GERMAN 

ECONOMIC  DEVELOPMENT        ....      I34 


A    p^  r'y  ^\  1 


INTRODUCTION 

There  is  a  vast  difference  of  opinion  in 
Germany  about  Hugo  Stinnes,  but  his 
name  is  on  everybody's  lips  and  his  activ- 
ities are  the  subject  of  constant  discus- 
sion. 

For  many  people  he  is  an  idol,  for  others 
he  is  a  terror  abroad  in  the  land.  The  so- 
cialists of  the  Vorwärts  look  upon  him  as  a 
necessary  product  of  evolution  and  a  path- 
finder for  the  state  of  the  future.  According 
to  Marxian  theory,  he  is  converting  cap- 
italism into  the  cocoon  stage  from  which 
the  finished  butterfly  of  socialistic  collec- 
tivism will  some  day  emerge.  He  should 
therefore  not  be  disturbed  in  his  activities! 

Socialists  may  yet  come  to  appreciate  him 

vii 


INTRODUCTION 

as  one  of  their  greatest  figures.  Socialists 
of  a  different  persuasion  regard  him  as  a 
loathsome  vampire  of  the  proletariat.  W. 
von  Moellendorf  suspects  Stinnes  of  being  an 
opportunist  emancipated  from  all  moral 
considerations,  whereas  Walter  Rathenau 
characterizes  him  as  a  particularistic  indus- 
trial baron  whose  work  is  destroying  the 
present  system  as  a  step  towards  collectiv- 
ism. Sentimental  Rhinelanders  speak  of 
"Hugo"  with  the  same  respectful  famili- 
arity with  which  the  Israelites  may  have 
used  the  name  of  their  leader  in  the  desert. 
And  undoubtedly  many  a  simple  soul  pic- 
tures this  enigmatic  man  as  a  just  and  stern 
patriarch. 

Stinnes  is  certainly  no  fine  phrase-maker 
or  dreamer.  He  is  never  idle.  While  thou- 
sands of  brain  and  manual  workers  are 
standing  by  in  despair,  and  thousands  of 
the  most  intelligent  leaders  are  endlessly 
discussing  what  kind  of  cement  should  be 
used   in    the    reconstruction   of  Germany, 

this  man,  calm  and  unconcerned,  is  building 

viii 


INTRODUCTION 

what  may  be  either  an  edifice  of  steel  des- 
tined to  outlast  time,  or  a  Babylonian 
Tower  that  will  plunge  the  builders  into 
confusion. 


HUGO   STINNES 

CHAPTER  I 

THE    PERSONALITY   OF   HUGO    STINNES 

Hugo  Stinnes  has  reached  the  age  of  fifty. 
He  has  the  appearance  of  a  worker  and 
could  go  about  in  the  clothes  of  a  foreman 
or  a  miner  without  attracting  attention. 
He  is  like  a  piece  of  coal  wandering  about 
among  his  own  coal  mines. 

His  thick  head  is  set  upon  a  stocky  trunk. 
His  black  hair  is  cut  close,  the  face  is  pale 
and  expansive,  the  beard  is  black  as  coal, 
the  nose  is  curved  and  the  eyes  are  heavily 
underlined.  A  German  paper  recently 
called  him  the  "Assyrian  King.'* 

His  external  appearance  is  devoid  of  pose, 
he  seems  heavy  and  solid.    He  walks  with  a 


_  HUGO  STINNES 

slight  stoop  and  shuffles  along  like  a  sailor. 
Clothes,  habits  and  bearing  denote  a  man 
of  simple  tastes.  "His  pale  face,  his  rather 
tired  eyes  and  his  modest  clothes  make  him 
look  more  like  a  labor  secretary  than  a  Ger- 
man Rockefeller" — to  quote  a  French  re- 
porter who  saw  him  in  Spa.  _ 

Stinnes  never  stops  working.  It  would 
certainly  be  a  mistake  to  assume  that  he  is 
driven  by  personal  ambition,  or  money 
greed,  or  considerations  of  public  welfare. 
Anyone  who  knows  the  captains  of  industry 
of  the  Rhine-Westphalian  district  in  their 
own  bailiwick,  will  understand  him.  These 
men  have  an  irresistible  impulse  to  do  cre- 
ative work.  They  are  the  engineers  who 
organize  human  activity  for  constructive 
work;  they  know  their  building  material 
through  and  through,  and  often  go  on 
scheming  and  figuring  in  their  sleep,  while 
dreaming  about  new  combinations.  These 
dyed-in-the-wool  industrial  leaders  know 
nothing  of  rest,  luxury,  or  enjoyment. 
They  live  and  toil  in  the  simplest  surround- 


HUGO  STINNES 

ings.  Even  in  their  rare  moments  of  leisure 
they  have  a  preoccupied  air,  as  if  their 
minds  were  busy  with  problems.  One  can- 
not imagine  men  Hke  Thyssen,  Klöckner, 
Kirdorf  or  Stinnes  at  a  cabaret.  Nor  will 
you  find  them  in  the  false  heroic  pose  of  the 
period  of  Kaiser  Wilhelm's  romanticism.  It 
is  interesting  to  know  that  these  men  can 
drive  through  the  workingmen's  quarters  in 
their  automobiles  without  causing  resent- 
ment. The  laboring  classes  have  an  infal- 
lible instinct  for  workers  and  drones.  Even 
the  most  radical  class  antagonist  realizes 
that  there  is  something  more  in  men  like 
Stinnes  than  the  impulse  to  exploit,  and  the 
desire  for  luxury.  Otherwise  it  would  be 
inexplicable  that  even  during  the  most  agi- 
tated periods  of  revolutionary  disturbance 
in  the  industrial  section,  no  weapon  has 
ever  been  raised  against  them. 

These  men  are  noted  for  their  practical 
point  of  view.  This  is  the  source  of  their 
strength.  Their  nerves  are  fresh  and  are 
not  influenced  by  emotions.    But  this  ex- 

I 


HUGO  STINNES 

elusive  devotion  to  practical  considerations 
is  also  a  source  of  weakness.  These  men 
lead  a  life  of  strict  routine,  and  are  chained 
to  their  work  like  convicts;  they  are  out  of 
the  ordinary  run  and  therefore  they  stand 
apart;  they  are  the  victims  of  their  destiny. 
Many  pages  of  the  book  of  life  are  closed  to 
them,  though  they  are  the  rulers  of  life. 
No  power  of  will  can  carry  them  beyond 
the  walls  which  their  own  labors  have 
built  around  them.  They  have  no  leisure 
and  do  not  become  patrons  of  the  arts. 
Nor  do  they  aspire  to  the  fame  of  a  Mae- 
cenas. 

For  what  do  these  men  toil.?  By  this 
time  Hugo  Stinnes  has  made  a  large  for- 
tune which  is  increasing  from  day  to  day; 
his  power  and  his  influence  are  incalculable. 
Even  if  he  could  take  the  time  for  it,  he 
would  find  it  impossible  to  spend  all  his 
wealth  and  enjoy  it.  But  these  men  do  not 
even  take  the  time  for  rest  which  every 
other  laborer  claims.  Thyssen,  an  old 
man  of  almost  eighty  years,  rides  to  his 

4 


HUGO   STINNES 

office  every  morning  at  eight  o'clock,  in 
a  street  car,  shoulder  to  shoulder  with 
his  own  workmen.  It  is  quite  possible 
that  these  men  never  stop  to  think  why 
they  work. 

Not  long  ago  a  foreman  rode  home  with 
Stinnes  at  the  end  of  a  strenuous  day.  In 
the  course  of  the  conversation  he  asked 
him:  "Tell  me,  Mr.  Stinnes,  why  do  you 
still  work  so  hard?"  Stinnes  gave  him  a 
peculiar  look  and  said:  "For  my  children." 
Surely  a  curious  answer!  Did  Stinnes 
mean  it  ironically,  as  a  challenge  to  this  in- 
quisitive union  man.?  Or  was  he  uncon- 
sciously expressing  the  dynastic  feeling  of  a 
family  that  has  now  been  in  the  saddle  for 
three  generations.?  We  know  the  impor- 
tance which  Hugo  Stinnes  attributes  to 
the  family,  and  especially  to  a  family  such 
as  his.  The  unusual  demands  which  he 
makes  upon  his  relatives  show  that  he 
expects  them  to  live  up  to  the  family  tra- 
dition. 

The  present  activities  of  Hugo  Stinnes 

5 


HUGO  STINNES 

can  hardly  be  surveyed.  His  associates  are 
numerous  and  include  men  of  great  energy, 
experience,  and  efficiency.  Some  of  them 
have  had  life-long  experience  in  the  man- 
agement of  great  organizations,  but  Stinnes 
always  remains  in  control.^  It  is  note- 
worthy that  his  oldest  son,  Hugo,  who  may 
prove  to  be  a  greater  business  genius  than 
his  father,  is  developing  an  unusually  inde- 
pendent initiative. 

The  personal  fortune  of  Hugo  Stinnes 
has  been  the  subject  of  many  conjectures, 
some  of  which  are  quite  exaggerated.  But 
we  must  not  forget  that  the  organizations 
which  belong  to  him  personally  are  rela- 
tively few  in  number  compared  to  the  nu- 
merous stock  companies,  participation  com- 
panies, and  family  companies,  which  are 
included  in  the  Stinnes  Trust. 

Hugo  Stinnes  has  a  genius  for  being  de- 
tached and  practical.  Not  only  does  he 
control    his    own    organization    with    the 

1  The  Red  Flag,  a  socialist  paper,  recently  published  a  poem 
which  represents  Stinnes  in  complete  control  of  German  indui- 
try,  German  business  talent,  and  German  politics. 

6 


HUGO  STINNES 

highest  mathematical  intelligence,  but  he 
also  has  a  sure  instinct  for  practical  com- 
binations in  every  sphere  of  business.  He 
recognizes  economic  possibilities  with  far- 
reaching  implications  while  others  still  ig- 
nore them.  He  does  not  go  in  for  over- 
ingenious  schemes;  he  is  always  construc- 
tive. He  can  reverse  his  position  at  any 
moment  without  running  the  risk  of  dis- 
organizing his  work.  These  characteristics 
alone,  however,  would  not  be  sufficient  to 
make  him  a  power  in  the  Germany  of  to- 
day. There  is  the  added  factor  that,  in 
times  when  others  lack  will-power,  his  de- 
termination is  firm;  that  in  the  midst  of 
general  instability,  he  has  managed  to  re- 
main unshaken.  His  poise  and  confidence 
are  a  part  of  his  character  and  do  not  have 
to  be  paraded  in  public. 

This  is  the  secret  of  his  power  of  sugges- 
tion over  everybody  with  whom  he  comes 
in  contact.  Hence  also  the  secret  of  his 
control  of  men  and  circumstances.  His  at- 
titude towards  labor  and  labor  leaders  is 
2  7 


HUGO  STINNES 

peculiar  to  himself.  His  relations  with  the 
unions  are  conducted  in  a  brusque  tone. 
He  does  not  take  offense  at  unvarnished 
truths  or  even  at  downright  rudeness,  if  it 
is  honestly  meant.  As  soon  as  he  perceives 
that  his  opponent  has  a  clear  and  succinct 
point  of  view,  he  is  open  to  argument.  He 
openly  attacks  mere  tactics  or  else  ignores 
them  altogether.  He  is  not  friendly  to 
theories.  Occasionally  he  does  not  mind 
listening  for  an  hour  or  so  to  a  theorist. 
He  likes  to  analyze  and  refute  unsound 
theories,  in  the  very  act  of  listening  to  them. 
He  thinks  in  economic  terms.  When  he 
proposes  to  have  his  employees  participate 
in  an  enterprise  by  taking  shares  in  it,  he 
is  guided  by  the  thought  of  enlisting  hither- 
to unutilized  energies.  In  his  socialistic 
projects,  his  idea  is  to  have  business  benefit 
from  the  participation  and  joint  respon- 
sibility of  labor.  Nevertheless  he  is  a  busi- 
ness aristocrat.  This  may  be  due  to  the 
fact  that  he  does  not  feel  that  the  period  of 

collectivism  has  arrived,  and  because  he 

8 


HUGO   STINNES 

knows  that  formal  democracy  breaks  down 
in  actual  human  relations,  or  perhaps  he 
cannot  help  himself.  As  long  as  there  is  a 
general  belief  that  reforms  can  be  brought 
about  by  the  mere  fiat  of  theorists,  he  will 
probably  continue  to  subject  every  new 
theory  to  the  acid  test  of  practical  appli- 
cation. 

During  the  recent  debate  in  Germany 
about  socializing  all  industries,  Stinnes  was 
frequently  consulted.  His  position  was 
that  he  did  not  reject  collectivism  but  ob- 
jected to  having  it  established  by  decree. 
He  did  not  dispute  the  theory  but  openly 
stated  his  conviction:  **As  regards  the 
form  of  collectivism,  you  will  always  have 
to  adapt  yourselves  to  previous  experience. 
Under  no  circumstances  must  you  under- 
estimate the  importance  of  the  individual." 
He  always  proceeds  from  the  simplest  ex- 
perience: *'When  I  am  about  to  start  a 
new  enterprise  I  always  ask  two  preliminary 
questions  .  In  the  first  place,  where  is  the 
man  to  organize  it.?     Secondly,  where  are 

9 


HUGO  STINNES 

the  efficient  workmen  ?  If  these  two  requi- 
sites are  lacking,  I  keep  my  hands  off. 
This  way  of  looking  at  the  problem 
will  have  to  be  observed  in  the  future. 
You  must  leave  to  the  organizer  what 
is  the  organizer's  business — leadership. 
And  you  must  see  to  it  that  labor  gets  a 
fair  reward  and  a  good  living  out  of  the 
enterprise/' 

Up  to  the  present,  the  debate  about  so- 
cializing industries  has  not  been  able  to 
solve  this  problem  in  any  other  way.  Le- 
gien,  the  deceased  leader  of  the  German 
socialist  unions,  who  had  been  in  favor  of 
putting  socialism  into  practice  immediately, 
arrived  at  the  same  conclusion,  and  ac- 
knowledged that  the  interests  of  both  em- 
ployer and  employee  must  be  consulted. 
In  a  conversation  with  Stinnes  he  once 
expressed  himself  as  follows:  "It  is  a  pity 
that  we  did  not  get  to  know  each  other 
years  ago;  in  that  case  many  things  in  the 
labor  movement  and  in  industry  might  have 
turned  out  differently." 

lO 


HUGO  STINNES 

Stinnes  has  a  remarkable  influence  upon 
public  opinion,  yet  he  seldom  appears  in 
public.  His  recent  purchase  of  a  string  of 
newspapers,  which  will  be  discussed  later 
on,  led  many  people  to  surmise  that  he  was 
looking  for  a  means  of  expressing  his  point 
of  view.  But  his  acquisition  of  plants 
covering  the  whole  scale  of  production, 
from  cellulose  factories  and  paper  mills,  to 
printing  establishments  and  publishing 
houses,  would  seem  to  indicate  that  he  is 
more  concerned  with  a  large  economic  con- 
solidation. 

On  one  occasion,  namely  at  the  Spa  con- 
ference, Stinnes  did  make  a  public  declara- 
tion. He  attended  the  conference  as  an 
expert,  and  read  his  opinion  about  the  coal 
situation  from  a  manuscript,  in  a  high  weak 
voice  which  was  in  curious  contrast  to  his 
robust  appearance.  When  he  referred  to 
certain  individuals  being  "afflicted  with  the 
incurable  illness  of  victory,"  he  was  cau- 
tioned by  the  chairman  of  the  conference 

to  moderate   his  words.     Stinnes   merely 

II 


HUGO  STINNES 

looked  up  briefly  from  his  manuscript  and 
replied:  "I  am  not  here  for  the  sake  of 
being  pohte."  His  speech,  which  attracted 
wide  attention,  expressed  his  conviction 
that  the  reparation  problem  was  a  problem 
of  European  economics  which  could  be 
solved  only  through  the  full  cooperation 
of  both  the  victors  and  the  vanquished. 
Stinnes  was  speaking  in  terms  of  strict 
economic  necessity,  and  his  words  echoed 
harshly  in  the  rarefied  atmosphere  of  diplo- 
macy, tactics,  and  psychological  subtleties 
which  pervaded  Spa. 

The  men  of  the  Stinnes  family  have  al- 
ways clearly  foreseen  the  steps  of  industrial 
evolution.  Their  efforts  have  decisively  in- 
fluenced economic  development.  To  attain 
a  correct  estimate  of  Hugo  Stinnes  and  his 
significance — for  he  is  a  force  to  be  reck- 
oned with — it  is  necessary  to  trace  the  en- 
terprises of  his  family  as  well  as  his  own 
earlier  projects.  Those  who  bear  the  name 
of  Stinnes  have  never  been  communicative 
and  have  developed  no  theories.     For  that 

12 


HUGO  STINNES 

reason  it  is  much  more  interesting  and 
important  to  observe  what  they  have  done 
than  to  listen  to  what  they  have  had  to 
say. 


CHAPTER  II 

HIS   ANCESTORS 

The  history  of  the  Stinnes  family  reflects 
a  century's  development  of  the  Rhine- 
Westphahan  industrial  section,  and  with 
it  of  German  economic  history.  The  Ger- 
man development  from  the  eighteenth  to 
the  nineteenth  century  was  marked  by 
political  dissension,  cramped  economic  con- 
ditions, small  scale  production,  and  petty 
politics  among  the  guilds.  But  it  was  not 
long  before  the  waves  of  political  and 
economic  upheaval  swept  over  the  country 
from  the  west,  while  technical  advances  in 
science  and  manufacture  were  making  their 
first  appearance  in  obscure  workshops  and 
laboratories. 

Despite  the  system  of  small  states,  the 
Rhine -Ruhr  district  was  already  an  eco- 

14 


HUGO  STINNES 

nomic  unity  at  the  beginning  of  the  nine- 
teenth century.  Coal,  iron,  and  water 
transportation  formed  the  basis  of  indus- 
trial development.  Steel  from  the  famous 
Berg  district,  woolen  goods  from  the  manu- 
facturing centres,  silks  and  linens  from  the 
industrial  centres  of  the  Rhine  were  known 
in  every  country.  To  this  day  the  saws  of 
Remscheid,  the  locks  of  Velbert,  the  rivets 
of  Altena,  and  the  steel-ware  of  Solingen, 
have  a  traditional  reputation  throughout 
the  world. 

The  northwestern  part  of  Germany  was 
the  logical  place  for  the  development  of 
industrial  leaders.  Krupp,  Thyssen,  Kir- 
dorf,  Haniel,  and  Stinnes,  all  developed 
into  captains  of  industry  with  the  aid  of 
coal  and  iron.  Their  opponents,  the  most 
important  representatives  of  modern  so- 
cialism, also  grew  up  in  this  region.  Karl 
Marx  was  born  in  Treves,  at  the  junction 
of  the  Saar  and  the  Rhine,  Frederick 
Engels  hails  from  the  thriving  Wupper 
valley,  Bebel's  cradle  stood  in  the  suburbs 

IS 


HUGO  STINNES 

of  Cologne,  and  Lassalle,  coming  from  the 
eastern  part  of  Germany,  reached  the  height 
of  his  career  in  the  Rhine  district. 

In  the  year  1808,  Mathias  Stinnes,  the 
son  of  a  shipping  man  who  had  gone  into 
the  transportation  business  on  the  Ruhr, 
made  himself  independent  in  Mülheim. 
Hardly  eighteen  years  old,  precocious,  dar- 
ing and  determined,  he  was  a  genuine  off- 
spring of  the  district,  having  grown  up  in 
the  midst  of  the  coal  fields  and  within  sight 
of  the  Rhine,  the  oldest  highway  of  com- 
munication in  Europe.  At  that  time  just 
as  at  present,  the  French,  whose  revolu- 
tionary passion  had  been  skillfully  deflected 
into  ambitious  dreams  of  expansion  by 
Napoleon,  occupied  the  left  bank  of  the 
Rhine.  French  rule  brought  about  im- 
portant changes  in  the  Rhine  lands.  Petty 
politics  and  shortsighted  economic  policies 
had  obstructed  the  Rhine  at  innumerable 
places,  until  the  river,  including  the  high- 
ways running  along  its  banks,  was  little 

more  than  a  prolific  source  of  revenue  for 

16 


HUGO  STINNES 

the  states  that  bordered  upon  it.  From 
Bingen  to  Bonn  a  merchant  had  to  cross 
the  border  eight  times,  and  from  Germers- 
heim to  Rotterdam  one  had  to  pay  duty  at 
no  less  than  32  stations.  At  that  time  the 
aboHtion  of  duties  and  border  restrictions 
was  already  under  way,  but  the  period  of 
the  Continental  blockade  soon  intervened. 
Export  on  any  large  scale  was  restricted 
and  the  importation  of  raw  materials  was 
heavily  penalized.  It  was  of  little  benefit 
to  Mülheim  on  the  Ruhr  to  receive  the 
status  of  a  city  from  the  French,  in  1808. 
The  atmosphere  was  not  cleared  until  18 15, 
when  the  Congress  of  Vienna  decided  to 
incorporate  the  city  with  Prussia. 

Thus,  Mathias  Stinnes  had  no  easy  time 
of  it  when  he  formed  his  company.  On  the 
Ruhr,  it  is  true,  he  was  not  handicapped  so 
much  by  existing  conditions  as  on  the 
Rhine.  He  bought  his  first  coal  barge,  to- 
gether with  a  quantity  of  coal,  in  18 10  for 
the  price  of  1240  German  dollars.  During 
the  next  decade  he  bought  additional  coal 

17 


HUGO  STINNES 

mines  on  the  Ruhr.  Soon  after,  his  barges 
were  to  be  seen  on  the  Rhine.  In  1817 
Mathias  Stinnes  was  already  opening  the 
important  shipping  hne  from  Cologne  to 
Rotterdam,  with  a  regular  service  of  nine 
of  his  own  ships.  At  the  same  time  he 
began  to  construct  his  own  equipment;  he 
built  his  ships  in  his  own  yards.  From 
then  on  the  firm  expanded  rapidly.  By 
1820,  Mathias  Stinnes  owned  66  coal  barges 
on  the  Rhine  and  the  Ruhr,  which  plied 
regularly  upstream  on  the  Rhine  to  Bonn 
and  Coblenz,  and  downstream  to  the  Dutch 
maritime  ports. 

This  was  bound  to  lead  to  an  expansion 
of  the  field  of  activity.  The  barges  which 
took  the  coal  north  and  south  from  Mül- 
heim were  loaded  with  colonial  goods  in 
Holland,  and  with  salt  in  Wesel,  from  the 
royal  reservation;  from  the  Ruhr  district 
they  brought  ironware  and  textiles  as  well 
as  coal,  and  were  loaded  at  the  upper  Rhine 
for  the  down  trip  with  wine,  dry  vegetables, 

grain,  and  ores.     Mannheim,  which  to-day 

18 


HUGO   STINNES 

is  the  reloading  station  for  American  grain, 
was  at  that  time  the  shipping  port  for  Ger- 
man grain  destined  for  America. 

For  a  long  time  this  shipping  business 
had  to  contend  with  various  obstacles. 
The  right  to  launch  ships  on  the  Rhine, 
and  the  freight  rights  of  the  Rhine  ports 
were  still  restricted,  and  the  navigation 
guilds  exercised  various  monopolies.  The 
Rhine  navigation  acts,  which  were  unified 
in  183 1  at  Mainz,  finally  estabUshed  free- 
dom of  communication  on  the  Rhine. 
Mathias  Stinnes  contributed  to  no  small 
extent  to  this  improvement  by  taking 
things  into  his  own  hands  and  by  presenting 
clever  petitions  to  the  authorities.  There 
were  most  amusing  controversies  between 
the  astute  and  farsighted  shipping  bosses  of 
Mülheim,  the  ''subject"  Stinnes,  and  the 
bureaucratic  officials  of  some  of  the  govern- 
ment posts.  Nor  did  Mathias  Stinnes  hesi- 
tate to  undertake  the  complicated  journey 
to  Berlin  whenever  his  interests  required  it. 
He  is  said  to  have  had  the  same  gift  for  over- 

19 


HUGO  STINNES 

awing  government  officials  with  which  his 
grandson,  Hugo  Stinnes,  is  credited  to-day. 

By  1 83 1  the  navigation  acts  had  cleared 
the  Rhine  for  Mathias  Stinnes.  The  out- 
put at  the  mines,  as  well  as  the  whole  busi- 
ness of  the  district,  immediately  experi- 
enced a  substantial  increase  through  the 
opening  up  of  a  dependable  market  for  all 
products  as  far  as  the  territory  of  the  upper 
Rhine  and  the  Main.  Mathias  Stinnes 
made  close  connections  with  Mainz,  Frank- 
furt, Worms,  Mannheim,  Karlsruhe,  and 
Strassburg.  He  even  did  not  hesitate  to 
send  his  ships  from  the  Rhine  to  Stettin 
and  Hamburg,  by  way  of  the  open  sea. 
His  enterprising  spirit  proved  especially 
helpful  to  Mülheim  when,  together  with 
Hugo  Haniel,  he  undertook  the  develop- 
ment and  equipment  of  the  port  facilities. 
He  also  built  the  pontoon  bridges  at  Cob- 
lenz  and  Düsseldorf. 

But  his  main  interests  continued  to  cen- 
tre in  the  Rhine.     As  late  as  the  forties, 

ships  on  the  river  were  worked  by  means 

20 


HUGO   STINNES 

of  hand-  and  horse-power,  while  downstream 
they  drifted  with  the  current.  Sails  could 
rarely  be  used.  Though  an  occasional 
steamer  had  plied  the  Rhine  before  Stinnes' 
time,  he  was  the  first  to  use  a  real  tug,  and 
thus  initiated  the  important  Rhine  freight 
service.  It  is  worth  mentioning  that  at 
that  time  the  Exchequer  held  a  long  and 
circumstantial  debate  about  the  pros  and 
cons  of  a  state  towing  monopoly.  This 
plan  was  debated  interminably,  until  no- 
body any  longer  believed  that  it  could  be 
carried  out.  In  the  meanwhile,  Mathias 
Stinnes  ordered  his  first  steam  tug  from 
the  shipyards  of  Ditchborne  &  Marie,  in 
London.  The  first  Stinnes  steamer  plied 
on  the  Rhine  in  1843.  The  Stinnes  fleet 
remains  to-day  the  biggest  and  most  im- 
portant fleet  on  the  Rhine. 

It  was  soon  found  that  the  first  tug  was 
not  powerful  enough.  A  second  tug,  built 
in  Holland  and  christened  *' Mathias  Stin- 
nes I,"  became  the  head  of  a  fleet  of  power- 
ful tugs. 

21 


HUGO  STINNES 

At  first  there  was  considerable  opposi- 
tion to  the  use  of  steam  power  on  the 
Rhine,  as  shown  by  an  incident  which  oc- 
curred in  1848,  when  the  tug  "Mathias 
Stinnes  I"  had  just  begun  its  Rhine  serv- 
ice with  a  fleet  of  barges  in  tow.  There 
had  been  great  excitement  among  the 
peasants  and  teamsters  of  the  middle 
Rhine,  who  usually  took  charge  of  the 
ships  at  Cologne  to  tow  them  to  the  mines. 
They  felt  keenly  the  decrease  in  their 
earnings  on  account  of  the  use  of  the  tugs, 
and  one  day  they  decided  to  take  matters 
into  their  own  hands.  It  was  secretly 
whispered  about  that  something  extraor- 
dinary was  about  to  take  place  on  the 
Rhine  at  Neuwied.  The  peasants  and 
teamsters  from  the  village  of  Weissenturm 
opposite  Neuwied  had  conspired  to  set  up 
a  number  of  mortars  and  small  cannon 
along  the  waterfront  at  Neuwied.  When 
the  tug  came  along  with  its  barges  in  tow, 
a  loud  bombardment  took  place  that  raised 

the   echoes   from   the   neighboring  moun- 

22 


HUGO   STINNES 

tains.  The  whole  Rhine  was  thickly  cov- 
ered with  clouds  of  smoke. 

The  inhabitants  of  Weissenturm  hoped 
that  at  such  a  reception  the  hated  tug 
would  at  once  cut  loose  from  its  haul,  and 
turn  about  face,  never  daring  to  come  up 
from  Mülheim  again.  But  the  conspiracy 
must  have  come  to  the  ears  of  the  captain, 
for  the  pilot  house  had  been  closely  barri- 
caded with  iron  plates,  and  not  a  soul  was 
to  be  seen  on  deck.  The  whole  line  of 
boats  passed  quietly  by,  despite  the  bom- 
bardment. The  peasants  and  teamsters 
had  to  resign  themselves  to  their  fate. 
But  for  many  months  the  ship  continued 
to  navigate  with  its  pilot  house  barricaded 
as  a  protection  against  further  occurrences 
of  this  sort. 

Mathias  Stinnes,  soon  known  as  "old 
Matt,"  after  having  been  in  business  for 
thirty-five  years,  perished  in  a  railroad 
bridge  accident  at  Hochfeld. 

Every  ship  in  the  Stinnes  fleet  bears  the 

name   of  its   founder   in   addition   to   the 
3  23 


HUGO  STINNES 

serial  number,  and  is  known  to  every  child 
on  the  Rhine.  The  type  of  ship,  the  kinds 
and  quantities  of  goods  carried,  have  of 
course  changed  appreciably.  Whereas  at 
the  beginning  of  the  Stinnes  line  the  old 
wooden  barges  were  about  200  tons  burden, 
the  type  of  steel  barge  most  in  use  to-day 
can  carry  a  load  of  from  1500  to  1700  tons. 
The  most  powerful  Stinnes  tugs  tow  four 
barges  with  an  aggregate  load  of  6,000 
tons,  equal  to  the  capacity  of  about  400 
freight  cars,  and  make  about  a  mile  and  a 
half  an  hour,  upstream.  The  great  role 
which  navigation  plays  in  the  Rhine-Ruhr 
district  is  revealed  by  the  fact  that  the 
volume  of  freight,  passing  through  the  port 
of  Duisburg  on  the  Ruhr  before  the  war, 
amounted  to  far  over  20,000,000  tons  an- 
nually, which  is  several  million  more  than 
the  freight  traffic  of  Hamburg. 

The  founder  of  the  house  of  Mathias 
Stinnes  built  up  three  main  branches  of 
the    business;    namely,    mining,    the    coal 

trade,  and  transportation.    When  he  died, 

24 


HUGO  STINNES 

in  the  year  1845,  he  left  a  firm  of  such  wide 
ramifications  and  many-sided  connections 
that  his  successor  might  well  experience 
difficulty  in  keeping  the  business  together. 
Several  successors  attempted  to  do  this  but 
failed.  His  son  Mathias,  Jr.,  popularly 
called  ''Little  Mathias,''  had  all  he  could 
do  to  keep  the  great  firm  going.  The  older 
Mathias  had  left  detailed  instructions  as 
to  the  future  policy  of  the  business,  and  the 
close  bonds  that  united  the  numerous  mem- 
bers of  the  family  forestalled  any  tendency 
to  a  division  of  interests.  Nevertheless  it 
was  found  necessary  in  1848  to  convert  the 
firm  of  Mathias  Stinnes,  Limited  into  a 
stock  company,  called  the  "  Mathias  Stinnes 
Trading  Corporation  of  Mülheim  on  the 
Ruhr,"  in  order  to  assure  its  continued 
existence.  At  that  time  the  Rhine  and 
Ruhr  fleets  together  comprised  60  coal 
barges.  The  firm  had  warehouses  in  Cob- 
lenz,  Mainz,  Mannheim,  and  Emmerich. 
It  mined  coal  on  four  of  its  own  mines 
known  respectively,  as  the  Victoria-Mathias 

25 


HUGO  STINNES 

mine,  the  Friedrich-Ernestine  mine,  the 
Graf  Beust  mine,  and  the  Carolus  Magnus 
mine.  In  addition,  it  had  majority  stock 
control  in  38  other  mines. 

The  following  years  revealed  the  solid 
foundations  of  the  old  firm  of  Mathias 
Stinnes.  Before  long  a  large  part  of  the 
shares  of  the  Mathias  Stinnes  Trading  Cor- 
poration of  Mülheim  on  the  Ruhr,  was 
again  in  the  hands  of  the  family.  In  i860 
the  members  of  the  family  dissolved  the 
corporation  and  reestablished  the  former 
firm  of  Mathias  Stinnes,  Limited.  Mathias 
Stinnes  had  left  seven  heirs,  consisting  of 
four  sons  and  three  daughters.  Mathias 
Stinnes,  Jr.,  died  in  1853,  when  Gustav 
Stinnes,  the  second  son  of  Stinnes,  Sr., 
took  over  the  management  of  the  firm  until 
his  death,  1878.  Thereupon,  Herman  Hugo 
Stinnes,  the  third  and  youngest  son  of 
Mathias  Stinnes,  headed  the  firm  until  his 
death  in  1887.  His  wife  was  Adeline 
Coupienne,  and  their  second  son  is  the  pres- 
ent Hugo  Stinnes,  born  February  22,  1870. 

26  " 


HUGO   STINNES 

At  its  hundredth  anniversary  Mathias 
Stinnes,  Limited,  owned  21  tugs  and  85 
barges,  having,  in  1906,  acquired  the  trad- 
ing and  shipping  corporation  of  H.  A.  Disch 
of  Mainz.  It  had  also  acquired  the  mine 
called  "Mathias  Stinnes,"  formerly  Car- 
nap,  which  became  the  most  important  of 
all  its  mining  properties. 

The  Stinnes  family  has  played  a  very 
important  part  in  the  organization  of  the 
Ruhr  coal  industry.  The  members  of  the 
family  are  among  the  founders  of  three  im- 
portant combines  in  the  Ruhr  district. 
These  are  the  Confederation  of  Mining 
Interests  under  the  Jurisdiction  of  the 
Board  of  Mines  for  Dortmund,  founded  in 
1858,  which  has  been  largely  responsible 
for  the  technical  development  of  mining; 
the  Rhine  -  Westphalian  Coal  Syndicate, 
formed  in  1893,  which  regulated  the  pro- 
duction, price,  and  distribution  of  the 
Ruhr  coal  deposits;  and  the  Rhine  Coal 
and   Shipping   Company,  formed   in    1903 

and  known  as  the  "Coal  Bureau."  This  so- 

27 


HUGO  STINNES 

called  "Coal  Bureau"  and  the  Rhlne- 
Westphalian  Coal  Syndicate,  usually  called 
the  *'Coal  Syndicate,"  control  the  produc- 
tion and  distribution  of  coal  in  the  entire 
Ruhr  district. 

In  the  course  of  a  century's  growth,  the 
firm  of  Mathias  Stinnes,  Limited  thus 
branched  out  into  transportation,  com- 
merce, and  mining,  on  an  imposing  scale. 


CHAPTER  III 

HIS   FIRST   ENTERPRISES 

Stinnes  began  his  career  under  favorable 
conditions.  Even  in  these  days  of  free  op- 
portunity Germany  can  show  no  industrial 
leader  of  the  calibre  of  a  trust  magnates/ 
who  has  reached  the  pinnacle  of  his  power 
by  climbing  up  from  the  bottom.  Klöckner,  f 
Krupp,  Rathenau,  Siemens,  are  all  men  who/ 
have  developed  their  inheritances.  The 
German  industrial  field  has  been  pretty 
well  divided  up.  It  is  necessary  for  the  in- 
dividual to  grow  up  in  it,  in  order  to  achieve 
importance.  Anybody  coming  from  the 
outside  is  bound  to  find  it  difficult  to  take 
root  in  this  soil.  Otto  Wolf  is  the  excep- 
tion which  proves  the  rule.  But  his  success 
lies  almost  exclusively  in  the  field  of  com- 
mercial enterprise.    Perhaps  it  is  due  to  the 

29 


HUGO  STINNES 

gigantic  concentrations  of  modern  business 
which  lead  to  the  absorption  of  numerous 
independent  concerns  which  cannot  resist 
this  process,  that  new  men  are  more  likely 
to  reach  a  commanding  position  within  this 
field.  The  Stinnes  Trust  shows  numerous 
examples  of  this.  Several  directors  of  the 
Stinnes  enterprises  have  risen  from  labor 
circles. 

But  it  is  not  enough  to  be  a  son  or  a 
grandson  to  ensure  success.  Respected  old 
names  are  constantly  disappearing.  Be- 
sides an  inheritance  and  a  tradition  behind 
him,  the  industrial  leader  of  to-day  must 
also  have  a  large  measure  of  power,  effi- 
ciency, and  personality. 

Hugo  Stinnes  had  the  tradition  and  the 
widely  ramified  connections  of  his  family. 
The  inheritance  in  itself  did  not  amount 
to  much.  After  a  short  period  of  com- 
mercial apprenticeship  in  Coblenz,  he  learnt 
the  mining  business  both  above  and  below 
ground  at  the  Wiethe  mine.  At  the  age  of 
nineteen  he  attended  a  school  ot  mining. 

30 


HUGO  STINNES 

Then  he  took  a  position  in  the  firm  of 
Mathias  Stinnes,  Limited.  After  two  years 
he  did  not  feel  himself  suited  there,  and  at 
the  age  of  twenty-three  he  formed  his  own 
firm  under  the  name  of  Hugo  Stinnes, 
Limited.  He  also  continued  as  director  of 
mining  operations  in  the  family  mines. 
The  paid-in  capital  of  his  firm  amounted  to 
50,000  marks. 

It  is  extraordinary  how  the  character- 
istics and  tendencies  of  the  old  Mathias 
Stinnes  reappear  in  his  grandchild.  One 
finds  the  same  restless  spirit,  the  same  dar- 
ing, the  same  talent  for  combinations  and 
constructive  effort.  But  the  field  of  ac- 
tivity for  these  powers  is  infinitely  greater. 
Never  before  have  the  opportunities  in 
German  industry  been  so  favorable  to  con- 
structive business  genius  as  they  are  to-day. 

Up  to  a  short  time  ago,  the  organizers  of 
gigantic  trusts  on  the  American  scale  were 
unknown  in  German  industrial  life.  For 
years  there  had  been  powerful  combina- 
tions of  finance  and  industry  under  various 

31 


HUGO  STINNES 

leaderships,  and  several  large  enterprises, 
such  as  those  of  Thyssen  and  Kirdorf,  had 
enjoyed  a  period  of  astonishing  growth,  due 
to  favorable  opportunities  and  the  daring 
of  those  in  charge.  But  it  sounded  in- 
credible to  Germans  before  the  war,  that 
the  industry  of  the  United  States  should  be 
dominated  by  five  men.  Carnegie's  United 
States  Steel  Corporation  and  Rockefeller's 
Standard  Oil  Company,  which  deal  in  mil- 
lions, were  regarded  by  them  as  examples 
of  industrial  empires. 

These  magnates  could  not  achieve  their 
billion-dollar  eminence  without  the  aid  of 
unlimited  stock  manipulation,  unscrupu- 
lous methods  in  killing  competition,  and 
unbridled  speculation.  A  dissolution  of  all 
established  economic  organizations,  and  the 
rapid  development  of  absolutely  new  forms 
of  organization  have  taken  place  in  Germany 
since  the  war.  The  extent  to  which  this 
has  gone  is  best  indicated  by  the  fact  that 
American  methods  of  financing,  of  pooling 
of  interests,    and   of   combinations,    have 

32 


HUGO  STINNES 

already  been  adopted  in  Germany,  and  are 
undergoing  further  development. 

At  the  height  of  the  trust  period  in 
America,  the  London  Economist  estimated 
that  the  five  magnates.  Rockefeller,  Harri- 
man,  Morgan,  Vanderbilt,  and  Gould,  were 
worth  over  three  billion  dollars  and  con- 
trolled over  thirty  billion  dollars,  which 
represents  the  greater  part  of  the  total 
American  capital  invested  in  banks,  rail- 
roads, and  industries.  This  gave  them  a 
very  considerable  control  of  the  industrial 
life  of  the  United  States. 

A  large  consolidation  movement  of  Ger- 
man industry  got  under  way  in  the  nine- 
ties. The  freedom  of  trade  in  the  nineteenth 
century  had  promoted  a  concentration  of 
power  in  industry,  commerce,  and  also  in 
agriculture,  which  led  to  strong  opposition 
from  the  smaller  business  interests,  as  well 
as  to  a  fierce  competitive  struggle  between 
those  in  control.  But  a  small  cycle  of  indus- 
trial crises  sufficed  to  make  even  the  most 
solid  business  men  recognize  on  what  inse- 

33 


HUGO  STINNES 

cure  foundations  their  enterprises  were 
based.  Thus,  various  industrial  groups 
entered  into  combinations.  At  first  the 
emphasis  was  laid  upon  common  interests. 
Coalitions  of  employers  and  employees 
were  formed  in  every  branch  of  industry  in 
order  to  secure  the  most  favorable  condi- 
tions for  both  parties.  These  defensive 
organizations  of  various  units  in  the  indus- 
try were  followed  by  consolidations  into 
larger  groups,  which  took  the  form  of  syn- 
dicates and  cartels.  Here  certain  limita- 
tions upon  independent  organizations  were 
mutually  accepted  for  the  purpose  of  avoid- 
ing the  slowing  up  of  sales,  price  fluctations, 
and  the  effects  of  crises.  At  the  same  time, 
associations  were  formed  for  reducing  the 
cost  of  production  and  retail  prices. 

These  consolidations  brought  about  a 
general  weakening  of  the  excluded  indus- 
trial units  and  led  to  fusions,  especially 
within  the  industry.  This  was  but  a  step 
removed  from  concentration  on  a  large 
scale  in  that,   for  example,  a   syndicated 

34 


HUGO  STINNES 

business  on  the  basis  of  cheaper  raw  ma- 
terials could  be  operated  more  profitably 
than  other  isolated  concerns  which  the 
syndicated  business  absorbed  one  after  the 
other. 

The  system  of  stock  companies  favored 
this  development  and  in  many  cases  was 
necessary  to  make  it  possible.  It  is  gen- 
erally admitted  that  in  former  days,  be- 
fore government  regulation  was  introduced, 
American  corporations  were  often  none  too 
scrupulous  about  the  law.  They  introduced 
many  new  methods  of  stock  participation 
and  of  pooling  of  interests,  which  frequently 
were  by  no  means  to  the  advantage  of  the 
general  public.  Some  of  these  methods 
have  come  into  general  use  and  have  also 
been  adopted  by  German  corporations.  It 
is  no  longer  a  secret  that  the  combinations 
of  transportation  systems  and  other  indus- 
trial interests  can  easily  lead  to  a  conceal- 
ment of  the  actual  assets  of  companies,  and 
in  fact  frequently  do  so.  They  also  lead  to 
consolidation«  of  »o  complicated  a  nature 

35 


HUGO  STINNES 

that  they  pass  beyond  the  power  of  any 
individual  to  survey. 

These  companies  may  often  be  compared 
to  the  numerous  links  of  a  chain  which 
are  under  the  control  and  direction  of 
anyone  who  has  the  first  link  in  his  hands. 
The  system  of  preferred  shares,  with  mul- 
tiple voting  power,  increases  the  possibili- 
ties of  exerting  influence  still  more.  At  the 
same  time  the  owners,  despite  their  com- 
paratively small  capital  investment,  have 
the  determining  vote  in  all  important  de- 
cisions of  the  company.  In  this  way  it  is 
easily  possible,  under  certain  circumstances, 
for  a  small  group  to  dominate  aff^airs  at 
will  without  much  outlay  of  capital.  These 
methods  are  justified  at  present  on  account 
of  the  danger  of  foreign  control,  due  to 
the  exchange  situation.  But  the  fact  re- 
mains that  it  is  always  possible  for  a  small 
group  to  bring  a  greater  and  greater  sec- 
tion of  industry  under  its  control. 

Anyone  who  has  the  influence  to  put 
through  a  scheme  of  industrial  control  can 

36 


HUGO  STINNES 

do  so  nowadays  on  a  much  larger  scale 
than  ever  before.  And  it  is  open  to  anyone 
to  misuse  this  power.  Unless  Germany  is 
willing  to  be  exposed  to  contingencies  and 
surprises  of  a  most  startling  nature,  she  will 
soon  have  to  recognize  the  necessity  of 
investigating  and  controlling  this  highly 
complicated  situation. 

The  movement  towards  consolidation  is 
well  under  way  in  German  industry.  Hugo 
Stinnes  is  one  of  the  main  forces  behind 
these  developments.  Mining,  the  coal  busi- 
ness, and  water  transportation,  form  the 
fulcrum  from  which  he  operates,  as  was 
the  case  with  his  grandfather  Mathias 
Stinnes.  He  runs  his  own  mines  and  ore- 
concentration  plants.  He  acquires  ships 
for  commerce  both  on  inland  waterways 
and  on  the  high  seas.  He  is  a  coal  dealer 
with  international  markets.  He  has  his 
branches  on  the  continent  and  overseas. 
His  ships  are  to  be  seen  on  rivers  and  canals, 
on  the  North  Sea  and  the  Baltic,  on  the 
Mediterranean,  and  on  the  Black  Sea. 

37 


HUGO  STINNES 

Hugo  Stinnes  began  to  exert  an  influence 
upon  the  construction  of  the  entire  German 
industrial  edifice  very  early  in  his  career, 
through  the  organization  and  the  various 
combinations  of  his  companies.  He  is  one 
of  the  controlling  figures  in  the  consolida- 
tion movement  in  the  mining  industry. 
The  Rhine-Westphalian  coal  district,  which 
a  hundred  years  ago  was  run  by  patri- 
archal operating  units  on  a  small  scale, 
in  the  course  of  the  nineteenth  century 
became  the  scene  of  large-scale  capitalistic 
operations  which  frequently  had  recourse 
to  unscrupulous  methods.  After  the  union 
of  the  Ruhr  district  with  Prussia,  the  in- 
dustrial forces  were  increased  through  the 
immigration  of  large  bodies  of  laborers, 
and  the  appearance  of  more  and  more 
employers.  Many  of  these  employers  were 
guilty  of  ruthless  exploitation  and  short- 
sighted methods  of  administration,  so  that 
they  were  not  unjustly  accused  of  putting 
the  slogan  *' Business  is  business,''  before 
every  other  consideration.    Wild  promotion 

38 


HUGO  STINNES 

and  unbridled  competition  combined  with 
panics  to  bring  about  uncertain  times  for 
the  mining  operations.  Production  and 
price  agreements  and  control  of  distribution 
were  evolved  with  increasing  frequency 
from  about  1870  on,  as  a  defense  against 
these  tendencies. 

We  have  already  seen  that  the  Stinnes 
family  had  always  been  a  leader  in  such 
endeavors.  It  is  therefore  not  astonishing 
to  find  young  Stinnes  familiar  with  this 
development.  He  soon  played  a  leading 
role  in  the  Rhine-Westphalian  Coal  Syn- 
dicate. The  syndicate  now  includes  prac- 
tically the  entire  coal  ouput  of  the  Ruhr 
basin,  and  regulates  production,  prices,  and 
consumption.  In  the  same  way  Hugo 
Stinnes  is  a  power  in  the  Coal  Bureau — 
the  very  name  is  indicative  of  the  practical 
spirit  of  this  district — which  has  been  in 
existence  since  1903,  having  brilliantly  or- 
ganized the  market  for  Ruhr  coal.  The 
Rhine  -  Westphalian  Coal  Syndicate,  the 
firms  of  Mathias  Stinnes,  Limited  and 
4  39 


HUGO  STINNES 

Hugo  Stinnes,  Limited,  and  a  number  of 
the  other  companies  have  considerable  capi- 
tal invested  in  the  Coal  Bureau. 

Hugo  Stinnes  soon  added  the  production 
of  iron  and  steel  to  the  production  of  coal. 
The  German-Luxemburg  Mining  &  Smelting 
Company  became  his  main  sphere  of  activity. 

The  district  of  German-Luxemburg  was 
developed  with  uncanny  rapidity.  At  the 
end  of  the  nineties,  the  Differdingen  Blast 
Furnace  Company,  Inc.,  in  Luxemburg, 
and  the  Dannenbaum  Mining  Company 
were  combined  into  the  Differdingen-Dan- 
nenbaum  Iron  &  Coal  Company.  But  this 
company  did  not  last  and  was  soon  liqui- 
dated with  considerable  loss  to  the  stock- 
holders and  creditors.  The  German-Luxem- 
burg Mining  &  Smelting  Company,  Inc., 
with  a  capital  of  1,000,000  marks,  was 
formed  in  190 1  at  Bochum.  This  corpora- 
tion took  over  the  Differdingen- Dannen- 
baum Iron  &  Coal  Company.  Within  the 
year  the  capital  stock  was  raised  to  25,000,- 
000  marks,  and  by  1910  this  figure  had  been 

40 


HUGO   STINNES 

increased  to  60,000,000  marks.  The  Ger- 
man-Luxemburg Mining  &  Smelting  Com- 
pany has  an  interest  in  the  Saar-Mosel 
Mining  Company  and  thus  procures  the 
coal  for  the  Differdingen  plant  at  a  con- 
siderable freight  saving. 

Soon  after  this,  the  German-Luxemburg 
Mining  &  Smelting  Company  was  further 
increased  by  the  addition  of  the  Union,  a 
technically  highly  developed  corporation 
engaged  in  the  mining  and  iron  and  steel 
business  at  Dortmund.  On  this  occasion 
the  capital  was  again  increased  so  that  it 
now  reached  100,000,000  marks.  In  this 
way  the  German-Luxemburg  Mining  & 
Smelting  Company  developed  into  the  Dif- 
ferdingen Smelting  Company,  whose  main 
business  consisted  in  exporting  to  Frank- 
furt, Belgium,  and  countries  oversea;  it 
thus  became  a  counterpart  of  the  Rhine- 
Westphalian  industrial  district.  Several 
mines  were  added  as  the  basis  for  a  coal 
supply  for  the  Dortmund  works.  In  order 
to  utilize  the  Saar  coal,  the  production  of 

41 


HUGO  STINNES 

iron  was  increased  through  the  addition  of 
the  blast  furnaces  and  steel  mills  of  Rü- 
melingen  and  St.  Ingbert. 

Altogether  the  German-Luxemburg  Min- 
ing &  Smelting  Company  comprises  estab- 
lishments at  Bochum,  Dortmund,  Mül- 
heim on  the  Ruhr,  Emden,  and  at  Differ- 
dingen  (Luxemburg),  though  the  last  has 
been  taken  away  through  the  liquidation 
resulting  from  the  treaty  of  peace.  The 
greater  part  of  the  mining  establishments  is 
situated  in  the  Ruhr  basin.  Here  the  com- 
pany owns  the  coal  and  iron-ore  works  of 
Dannenbaum,  the  mines  Prinz  Regent  and 
Friedlicher  Nachbar,  the  factory  at  Hasen- 
winkel,  and  the  series  of  mines  of  Bruch- 
strasse at  Langendreer,  Wiendahlsbank  at 
Annen,  Adolf  von  Hansemann  at  Mengede, 
Glückauf  Tiefbau,  Karl  Friederich's  Erb- 
stoUn  at  Stiepel,  Kaiser  Friedrich  at  Barop, 
Luise  Tiefbau  and  Tremonia  at  Dortmund. 

Besides  this,  the  company  is  interested  in 

the  Rhine-Westphalian  Mining  Company 

at  Mülheim  (Ruhr).    The  total  production 

42 


HUGO  STINNES 

of  the  coal  mines  amounts  to  over  5,000,000 
tons  annually.  The  coke  produced  annually 
amounts  to  1,300,000  tons.  The  by-prod- 
ucts consist  of  considerable  quantities  of 
ammonia,  tar,  benzol,  and  other  products. 
The  plants  at  Dortmund,  which  have  an 
exceptional  technical  equipment,  include 
six  blasting  furnaces  and  one  steel  plant,  be- 
sides rolling  mills,  pressed  steel  mills,  and 
foundries.  It  also  has  its  own  plants  to 
continue  the  manufacturing  process  up  to 
the  finished  product.  All  kinds  of  materials 
and  accessories  for  the  construction  of  rail- 
road engines  and  rolling  stock  are  manu- 
factured at  Dortmund.  The  electric  estab- 
lishments are  equipped  with  all  the  latest 
improvements  in  mining  technology.  The 
Dortmund  works  also  include  the  Horst 
iron  and  steel  works  with  their  own  blast 
furnaces,  a  screw  factory,  a  wagon-spring 
factory  and  a  series  of  subsidiary  factories. 
The  ore  for  the  Dortmund  Union  is  sup- 
plied primarily  from  its  own  iron-ore  mines 
on  the  Ruhr,  in  the  district  of  the  Sieg 

43 


HUGO  STINNES 

River,  on  the  Weser  River,  in  Nassau,  and 
in  the  Harz. 

The  mining  syndicate,  Friedrich  Wilhelm, 
at  Mülheim-on-the-Ruhr,  has  belonged  to 
the  German-Luxemburg  Mining  &  Smelt- 
ing Company  since  1905.  This  establish- 
ment owns  a  large  number  of  its  own 
mining  fields,  and  up  to  the  war  had  a 
share  in  the  Lorraine  mines.  The  mine  at 
Mülheim  includes  five  blast  furnaces  capa- 
ble of  producting  220,000  tons  annually. 
Large  foundry  establishments  manufacture 
machine  parts,  castings  and  pipes.  A  large 
number  of  establishments  with  the  most 
up-to-date  special  machinery  continue  the 
process  of  manufacture  of  steel  products. 
They  specialize  in  mining  and  foundry 
machinery,  so  that  the  German-Luxemburg 
Mining  &  Smelting  Company  is  in  a  posi- 
tion to  supply  its  own  technical  equipment. 

Since  191 1  the  German-Luxemburg  Min- 
ing &  Smelting  Company  has  been  lihked 
up  with  the  North  Sea  works  at  Emden. 
The  factories  there  are  being  enlarged  in 

44 


HUGO  STINNES 

conjunction  with  the  recent  Helling  estab- 
hshments.  The  North  Sea  factories  are 
interested  in  the  production  of  coal,  in  the 
coal  trade,  and  in  the  sale  of  benzol,  am- 
monia, and  tar,  through  the  agency  of  a 
number  of  companies. 

The  Hohenzollern  foundry,  situated  at 
Emden,  which  belongs  to  the  German- 
Luxemburg  Mining  &  Smelting  Company, 
has  its  own  mine  fields  in  Upper  Frankonia 
and  in  the  Upper  Palatinate. 

Through  the  North  Sea  works  at  Emden, 
the  German-Luxemburg  Mining  &  Smelt- 
ing Company  is  interested  in  the  German 
Navigation  Company,  "Midgard,''  at  Bre- 
men, in  the  Rhine  Navigation  Company,  and 
in  the  Mannheim  Towing  Company,  which 
provide  it  with  sea  and  river  transportation 
facilities. 

Before  the  liquidation,  brought  about  by 
the  treaty  of  peace,  extensive  factories  in 
Dififerdingen  and  Lorraine  belonged  to  the 
German-Luxemburg  Mining  &  Smelting 
Company.    The  Differdingen  works  owned 

45 


HUGO  STINNES  / 

ten  blast  furnaces  in  the  immediate  vicinity 
of  the  mines,  as  well  as  numerous  other 
factories  almost  entirely  engaged  in  manu- 
facturing iron  girders.  Since  191 1  these 
works  had  been  connected  with  the  mining 
and  foundry  establishments  of  Rümelingen 
and  St.  Ingbert  through  a  joint  agreement. 
Hugo  Stinnes  organized  and  administered 
this  gigantic  enterprise  with  great  success. 
By  means  of  the  saving  in  freight  rates, 
and  by  perfecting  the  management,  he 
made  it  possible  to  concentrate  upon  the 
production  of  a  highly  developed  finished 
article,  and  at  the  same  time  to  make  the 
business  extraordinarily  profitable.  The 
German-Luxemburg  Mining  &  Smelting 
Company,  with  more  than  40,000  em- 
ployees, thus  became  one  of  the  leading 
mining  establishments,  of  the  greatest  im- 
portance both  for  the  home  market  and 
for  the  export  trade. 

A  second  enterprise  of  gigantic  propor- 
tions, the  Rhine-Westphalian  Electric  Com- 

46 


HUGO   STINNES 

pany,  grew  up  under  the  direction  of  Hugo 
Stinnes  while  the  German-Luxemburg  Min- 
ing &  Smelting  Company  was  developing. 
This  was  founded  in  1898,  and  first  took 
over  the  management  of  an  electrical  plant 
in  Essen-Ruhr.  From  the  very  beginning 
the  object  of  this  enterprise  was  extraor- 
dinarily far-reaching.  The  Company  was 
intended  to  supply  the  whole  Rhine- West- 
phalian  industrial  district  with  electric 
power.  The  power  plant  at  Essen  was 
erected  in  immediate  connection  with  the 
old  Stinnes  mine  of  Victoria-Mathias.  In 
the  eastern  part  of  the  Ruhr  coal  basin  a 
second  modern  plant  was  erected  at  the 
coal  mine  Wiendahlsbank,  which  belongs 
to  the  German-Luxemburg  Mining  &  Smelt- 
ing Company.  By  1908  the  Rhine- West- 
phalian  Electric  Company  had  already  be- 
come so  large  that  the  eastern  plant  was 
combined  with  the  Westphalian  Electrical 
Works,  Inc.,  under  one  joint  management. 
The  territory  supplied  by  the  Rhine- 
Westphalian  electrical  power  stations  ex- 

47 


HUGO  STINNES 

tends  from  the  Dutch  border  on  the  north 
to  the  Ahr  valley  in  the  south,  and  almost 
entirely  includes  the  government  districts 
of  Düsseldorf  and  Cologne,  with  all  their 
townships. 

In  addition,  the  Company  developed  the 
gas  and  water  supply,  and  since  19 12  has 
undertaken  to  supply  the  gas  for  25  cities 
and  townships.  The  directorship  of  this 
electrical  industry  is  very  interestingly  or- 
ganized. The  ownership  of  the  Rhine- 
Westphalian  Electric  Company  is  in  the 
hands  of  both  individuals  and  municipali- 
ties. The  cities  of  Essen,  Miilheim-on-the- 
Ruhr,  Ruhrort,  Solingen,  Gelsenkirchen, 
and  numerous  other  municipalities,  own 
shares  in  the  Company. 

In  the  natural  course  of  its  development, 
the  Rhine-Westphalian  Electric  Company 
undertook  to  supply  the  Rhine-Ruhr  dis- 
trict with  a  comprehensive  network  of 
street-car  systems  and  small  gauge  railroads. 

Thus  Hugo  Stinnes  is  inextricably  asso- 
ciated with  the  Rhine-Westphalian  indus- 

48 


HUGO  STINNES 

trial  district.  By  virtue  of  the  many 
directorships  which  he  holds,  he  is  in  close 
touch  with  every  business  of  any  impor- 
tance in  this  industrial  section. 

Besides  this,  he  has  also  devoted  special 
attention  to  the  German  seaboard.  He  had 
already  anticipated  the  close  connection 
of  his  industrial  district  with  ocean  trans- 
portation, in  founding  a  small  establish- 
ment at  Harburg-on-the-Elbe.  This  was 
followed  by  the  formation  of  the  firm  of 
Hugo  Stinnes  Shipping  Company,  Limited, 
for  the  purpose  of  going  into  the  shipping 
business  on  a  large  scale.  This  firm  soon 
owned  13  of  its  own  steamers  with  which 
it  carried  coal,  ore,  wood,  and  grain,  to 
various  European  ports. 


CHAPTER  IV 

HIS    PART   IN  THE   WORLD   WAR 

The  activities  of  Hugo  Stinnes  during  the 

period  of  the  World  War  have  given  rise 

to  a  great  deal  of  contradictory  discussion. 

It  will  be  a  long  time  before  we  shall  be 

able  to  see  what  was  going  on  behind  the 

scenes  in  Germany  on  the  industrial  side 

of  the  war,  and  much  of  what  happened 

there  may  never  be  fully  cleared  up.     It 

is  generally  known  that  for  many  business 

men,  and  especially  for  those  engaged  in 

the  major  industries,  the  war  turned  out 

to  be  a  period  of  extraordinary  industrial 

acceleration.     In  a  state  which  in  normal 

times  shows  little  sympathy  for  collectivism, 

it  is  of  course  to  be  expected  that  a  period  of 

war  will  bring  out  the  same  clash  of  interests 

that  characterizes  a  highly  individualized 

50 


HUGO  STINNES 

industry,  and  will  even  sharpen  these  con- 
flicts still  more.  We  must  also  remember 
that  though  there  was  an  accurate  plan  for 
general  military  service,  not  even  the  most 
primitive  arrangements  for  general  indus- 
trial service  in  war  times  had  been  prepared. 

So  indefatigable  a  business  man  as  Hugo 
Stinnes  could  not  be  expected  to  remain 
idle  in  a  period  of  universal  activity.  He 
necessarily  made  the  greatest  possible  use 
of  every  opportunity,  without  reflecting 
particularly  about  the  unfortunate  causes 
that  had  made  these  opportunities  possible. 

The  liquidation  of  industries  in  occupied 
Belgium  forms  a  chapter  of  its  own.  The 
industrial  war  of  the  Entente,  the  blockade, 
and  the  influence  exerted  upon  neutrals, 
called  for  counter-measures  on  the  part  of 
the  Central  Powers.  The  liquidation  in 
Belgium  was  entrusted  to  the  German  in- 
dustrial leaders.  Three  companies  were 
formed  in  the  Ruhr  industrial  district:  the 
Industrial  Company,  Limited,  the  Trans- 
portation Company,  Limited,  and  the  Min- 

51 


HUGO  STINNES 

ing  Company,  Limited.  All  these  companies 
were  formed  in  19 16.  Among  those  inter- 
ested in  these  companies  were  Friedrich 
Krupp,  Inc.,  the  Phönix  Company,  the 
Gute  Hoffnung  Smelters  Company,  and 
the  German-Luxemburg  Mining  &  Smelt- 
ing Company,  Inc.  This  last  company  in- 
cluded Hugo  Stinnes.  These  three  com- 
panies played  a  great  part  in  carrying  out 
the  proposed  measures  for  taking  over  the 
Belgian  industries.  They  were  especially 
favored  in  regard  to  the  purchase  and 
management  of  Belgian  factories.  They 
further  secured  for  themselves  the  exclusive 
right  of  purchasing  coal  and  metal  mines, 
and  factories,  and  ran  the  Belgian  gas, 
water,  and  electric  works.  The  further 
plans  of  these  companies  were,  of  course, 
cut  short  by  the  outcome  of  the  war. 

During  the  war,  Hugo  Stinnes  greatly 
strengthened  his  grip  upon  German  indus- 
try. He  gave  his  special  attention  to  the 
development  of  the  trade  and  transporta- 
tion  possibilities   at   his   command.     The 

52 


HUGO  STINNES 

Hamburg  shipping  trade  formed  a  combina- 
tion with  the  metal  industries.  At  this 
time  Albert  Ballin  made  the  following  state- 
ment: "The  Hamburg  American  Line  in- 
tends to  consolidate  its  interests  more  defi- 
nitely and  completely  than  hitherto,  with 
the  capitalistic  groups  of  our  key  indus- 
tries and  our  banking  system." 

Stinnes  acquired  an  interest  in  various 
oversea  steamship  lines  and  mercantile 
firms.  In  191 8  he  became  interested  in  the 
Woermann  Line  and  in  the  German  East- 
African  Line.  He  established  close  connec- 
tions with  the  Hamburg  American  Line  and 
the  North  German  Lloyd  Line.  Before 
this,  the  Stinnes  Trust  had  already  taken 
over  several  importing  firms,  among  them 
the  coal  business  of  H.  W.  Heidmann  at 
Hamburg,  together  with  its  wharves  and 
steamers.  In  the  fall  of  1917,  Stinnes 
formed  the  Hugo  Stinnes  Ocean  Navigation 
and  Trading  Company,  Inc.  His  son  is 
especially  active  in  this  company. 

Since  the  middle  of  1918,  Stinnes  has  also 

53 


HUGO  STINNES 

been  interested  in  the  German-American 
Petroleum  Company  of  Hamburg.  Stinnes 
bought  the  Hamburg  City  Hall  Hotel,  and 
the  Hotel  Hamburger  Hof.  These  big 
buildings  were  converted  into  offices  and 
were  used  to  house  the  various  Boards  of 
Directors  and  their  executive  staffs. 

Additional  mercantile  firms  in  Königs- 
berg and  Bremerhaven  were  added  to 
Stinnes'  shipping  combine,  together  with 
the  Baltic  Navigation  Company  at  Flens- 
burg. Eleven  large  steamers  were  ordered 
from  various  German  shipyards.  After  the 
war,  the  entire  ocean  transportation  of  the 
Stinnes  Trust  was  to  be  handled  by  the 
Stinnes  fleet. 

At  the  same  time  Stinnes  secured  vast 
land  holdings  in  East  Germany  with  ex- 
tensive forests,  in  the  interests  of  his  mining 
business.  The  forests  were  intended  to 
provide  the  mining  timber  for  the  Stinnes 
mines.  Towards  the  end  of  the  war,  the 
Stinnes  Trust  also  acquired  interests  in  the 
Rhine  lignite  deposits.    Thus  a  mighty  in- 

54 


HUGO  STINNES 

dustrial  unit,  developed  and  directed  with 
great  forethought,  had  been  brought  to- 
gether under  the  powerful  leadership  of 
Stinnes  just  before  the  revolution  broke  out. 


CHAPTER  V 

THE  MINING  TRUST:  THE  RHINE-ELBE-UNION^ 

The  revolution  in  Germany  after  the  war 
gravely  threatened  the  complicated  struc- 
ture of  German  industrial  life.  Ballin,  the 
director  of  the  Hamburg  American  Line, 
saw  his  life  work  destroyed,  and  retired 
from  the  scene.  During  this  period  Hugo 
Stinnes'  nerves  remained  unruffled.  The 
peace  treaty  was  signed,  and  important 
sections  of  the  German  industry  were  de- 
tached from  the  main  body.  The  German- 
Luxemburg  Mining  &  Smelting  Company 
lost  all  its  enterprises  in  the  southwest, 
including  its  iron-ore  and  coal  supply.  In 
the  last  year  before  the  war,  the  south- 
western district  had  produced  the  enormous 

^  Rhine-Elbe  is  the  name  of  a  Gelsenkirchen  mine,  and  Union 
stands  for  a  Dortmund  factory  of  the  German-Luxemburg 
Mining  &  Smelting  Company. 

s6 


HUGO  STINNES 

amount  of  750,000  tons  of  pig  iron  for  the 
German-Luxemburg  Mining  &  Smelting 
Company,  and  had  mined  1,000,000  tons  of 
coal,  amounting  to  60%  of  the  entire  output 
of  the  Company.  The  Company  tried  to 
retain  the  Differdingen  works,  situated  in 
Luxemburg,  but  the  ore  deposits  upon 
which  these  factories  depended  were  located 
in  Lorraine.  Thus  this  enterprise  also  had 
to  be  sacrificed.  The  connection  with  the 
plant  at  Riimelingen-St.  Ingbert  was  like- 
wise destroyed. 

In  this  way  the  German-Luxemburg 
Mining  &  Smelting  Company  lost  its  entire 
investment  in  the  southwest.  A  French 
group  replaced  the  Stinnes  Trust  in  Luxem- 
burg and  Lorraine.  This  was  a  vital  blow 
to  the  Company,  although  the  purchase 
price  received  from  the  French  Company 
put  considerable  cash  at  its  disposal.  An 
important  source  of  supply  for  running  the 
factories  could  also  be  counted  upon  through 
an  agreement,  made  for  a  period  of  thirty 
years,  according  to  which  a  considerable 

57 


HUGO  STINNES 

proportion  of  the  ore  requirements  of  the 
German-Luxemburg  Mining  &  Smelting 
Company  was  assured. 

As  a  result  of  the  loss  of  St.  Ingbert,  the 
German-Luxemburg  Mining  &  Smelting 
Company  had  to  cast  about  for  new  manu- 
facturing plants  in  order  to  be  able  to  sup- 
ply the  necessary  intermediate  products 
for  the  manufacture  of  the  finished  goods. 
As  it  was  impossible  to  erect  any  new 
buildings,  the  Company  acquired  a  number 
of  old  factories.  Among  these  were  the 
steel  works  of  the  Brüninghaus  Company, 
Inc.,  and  the  firm  of  Friedrich  Thomee, 
Inc.,  both  situated  at  Werdohl,  as  well  as 
the  firm  of  Karl  Berg,  Inc.,  at  Eveking. 
These  factories  were  adopted  for  manu- 
facturing bar  and  plate  steel,  as  well  as 
castings,  springs,  and  wagon  parts.  Fur- 
ther purchases  included  the  steel  roller 
mills  of  Meggen,  the  chain  factory  of  Karl 
Schliepers  in  the  city  of  Grüne,  and  the 
rivet  factory  of  Knipping  Brothers  at 
Altena. 

58 


HUGO  STINNES 

But  these  protective  extensions  of  the 
industry  did  not  satisfy  Stinnes.  He  de- 
veloped a  project  capable  of  continuing  the 
unprecedented  growth  of  the  German-Lux- 
emburg Mining  &  Smelting  Company,  de- 
spite all  its  adversities.  His  attention  had 
been  directed  to  the  Gelsenkirchen  Mining 
Company,  Inc.,  another  gigantic  mining 
business  which  had  also  been  crippled  and 
reduced  through  the  treaty  of  peace. 

The  Gelsenkirchen  Mining  Company, 
Inc.,  was  the  work  of  the  brothers  Emil  and 
Adolph  Kirdorf.  It  was  founded  in  the 
year  1873  as  a  mining  business,  employing 
a  thousand  men,  and  for  a  long  time,  con- 
fined itself  to  coal  mining.  Important 
consolidations  gradually  enabled  the  busi- 
ness to  attain  a  commanding  position  in  the 
district.  In  1913  it  employed  55,000  hands, 
and  its  share  in  the  Rhine-Westphalian 
Coal  Syndicate  amounted  to  10,000,000 
tons,  representing  11%  of  the  whole  Syn- 
dicate. The  expansion  of  the  Gelsen- 
kirchen    Mining    Company,    Inc.    was    at 

59 


HUGO  STINNES 

first  in  a  horizontal  direction,  but  after  1905 
it  undertook  to  expand  vertically,  through 
a  consolidation  of  the  coal-consuming  in- 
dustries with  the  coal  producers,  especially 
through  consolidations  with  mining  syndi- 
cates at  Aix-la-Chapelle  and  at  Schalk. 

The  terms  "horizontal"  and  ** vertical" 
as  applied  to  trusts  require  a  word  of  ex- 
planation. A  horizontal  trust  approximates 
the  familiar  type  of  American  trust  which  is 
usually  a  consolidation  of  all  the  units  of  a 
particular  industry,  engaged  in  the  produc- 
tion or  manufacture  of  a  single  kind  or  type 
of  product.  The  object  of  such  a  trust  is 
to  produce  an  article  as  economically  as 
possible  and  to  exercise  a  monopolistic  con- 
trol over  it.  The  Standard  Oil  Company  is 
an  excellent  example  of  this  kind  of  trust. 
A  vertical  trust  is  a  complete  and  self- 
contained  consolidation  of  all  the  succes- 
sive stages  of  manufacture  from  the  produc- 
tion of  raw  material  to  the  final  distribu- 
tion of  the  finished  article.  It  is  an  indus- 
trial  cycle   completely   protected   at   both 

60 


HUGO   STINNES 

ends,  with  every  source  of  supply  and 
every  stage  of  production  in  the  same  hands. 
If  the  Standard  Oil  Company  acquired  coal 
and  iron  mines  to  manufacture  its  own  sup- 
ply of  oil  machinery,  tanks,  and  pipes,  con- 
trolled its  own  railroads  to  handle  its  tank 
cars,  and  built  its  own  tankers  in  its  own 
shipyards,  besides  controlling  the  automo- 
bile industry  in  order  to  find  a  market  for 
its  gasoline,  it  would  approximate  the  Ger- 
man idea  of  a  vertical  trust. 

Besides  its  mines  and  ore  fields,  the 
Gelsenkirchen  Mining  Company,  Inc.,  soon 
included  blast  furnaces,  steel  works,  wire 
factories,  and  similar  plants.  This  company 
laid  great  stress  upon  the  extension  of  its 
ore  basis.  As  the  interest  charges  were 
unusually  heavy,  the  Kirdorf  brothers  were 
compelled  to  pay  especial  attention  to  the 
reduction  of  production  costs.  They  skill- 
fully foresaw  the  necessity  of  technical 
improvements,  and  their  enterprise  became 
distinguished  for  its  gigantic  buildings  and 

the  modern  methods  constantly  introduced. 

6i 


HUGO  STINNES 

Thus  in  1913,  the  cost  of  new  buildings  and 
developments  was  estimated  at  6o,cx)0,ooo 
gold  marks.  The  result  of  the  war  was  a 
catastrophe  for  this  concern.  It  was  forced 
to  pay  terrible  penalties  for  its  expansion 
into  the  Minette  district,  another  German 
mining  field.  It  had  to  give  up  its  diversi- 
fied enterprises  and  return  to  mining.  For 
this  reason  Stinnes  could  count  upon  a 
friendly  reception  from  the  Gelsenkirchen 
Mining  Company  when  he  undertook  a 
rapprochement.  It  was  a  matter  of  sheer 
necessity  for  both  Kirdorf  and  Stinnes  to 
come  together.  Nevertheless  Kirdorf,  who 
has  always  been  known  for  his  independence, 
must  have  found  it  very  painful  to  combine 
his  life  work  with  that  of  another  man. 
The  consolidation  went  into  effect  in  July, 
1920.  The  control  of  the  two  businesses 
rests  with  the  Rhine-Elbe-Union.  The 
leaders  of  this  consolidation,  besides  Stinnes, 
are  General  Director  Vogler  of  the  German- 
Luxemburg  Mining  &  Smelting  Company, 

and  Emil  Kirdorf. 

62 


HUGO  STINNES 

The  German-Luxemburg  Mining  &  Smelt- 
ing Company  and  the  Gelsenkirchen  Min- 
ing Company  have  entered  into  an  agree- 
ment which  is  to  hold  good  for  eighty  years. 
They  now  complement  each  other  and 
mutually  aid  each  other's  development. 
They  form  a  mining  business  based  upon 
broad  foundations,  and  are  starting  under 
the  most  favorable  auspices.  Their  con- 
solidation into  the  Rhine-Elbe-Union  is  to 
last  until  the  year  2000. 


CHAPTER  VI 

THE   ELECTRO-MINING  TRUST:  THE   SIEMENS- 
RHINE-ELBE-SCHUCKERT-UNION 

These  tendencies  to  form  gigantic  fusion 
and  expansions  in  German  industry  cannot 
be  entirely  ascribed  to  personal  ambition  or 
to  the  craving  for  power.  The  driving 
forces  are  of  an  economic  nature.  Before 
the  war,  Germany  had  an  annual  increase  of 
population  which  amounted  to  more  than 
the  entire  population  of  a  large  city  like 
Detroit  or  Buffalo.  The  amount  of  arable 
land  did  not  keep  pace  with  this  increase. 
The  number  of  emigrants  was  inconsider- 
able. For  this  reason,  an  increased  produc- 
tivity from  year  to  year  was  necessary  in 
order  to  keep  up  the  standard  of  mainte- 
nance.     Compared  to  any  other   country 

Germany  had  a  very  small  number  of  people 

64 


HUGO  STINNES 

not  engaged  in  productive  labor.  Never- 
theless, the  production  of  goods  from  the 
country's  own  raw  materials  was  insufficient 
to  cover  the  basic  needs.  It  was  therefore 
essential  to  export  on  a  considerable  scale, 
either  through  the  direct  shipment  of  raw 
materials  for  foreign  needs,  or  through 
manufacturing  indigenous  and  imported 
raw  materials  into  finished  goods  for  export 
and  re-export.  In  order  to  ensure  adequate 
profit  from  this  export  trade,  it  became 
more  and  more  necessary  to  protect  the 
raw  material,  that  is,  to  convert  it  at 
home  into  partly  or  entirely  finished  goods. 
For  this  purpose  it  was  necessary  to  do  the 
manufacturing  at  home,  and  to  produce 
goods  of  the  finest  and  most  varied  grades 
of  workmanship.  It  was  essential  to  make 
the  raw  material  yield  the  greatest  possible 
increment  of  profit  and  wages  before  the 
goods  passed  out  of  the  country. 

Under  these  conditions  it  was  necessary 
to  develop  this  so-called  continuing  indus- 
try, and  to  foster  technical  improvements 

65 


HUGO  STINNES 

as  carefully  as  possible.  Quite  aside  from 
the  unavoidable  export  of  raw  materials, 
Germany  therefore  tended  more  and  more 
to  supply  foreign  markets  with  the  greatest 
possible  number  of  the  finest  grades  of 
manufactured  goods,  chemicals,  tools,  ar- 
ticles of  general  use,  dye-stuffs,  medicines 
and  similar  goods.  At  the  same  time,  it 
was  necessary  to  increase  the  output  and 
the  profit  of  the  industries  as  much  as  pos- 
sible in  order  to  compete  in  the  markets  of 
the  world. 

This  development  was  bound  to  lead 
to  consolidation,  mergers  and  trusts.  Fac- 
tories producing  the  same  or  similar  goods 
worked  more  economically  and  showed  a 
greater  yield  by  manufacturing  according 
to  a  joint  agreement  and  avoiding  duplica- 
tion. The  consolidation  of  industry,  and 
the  process  of  building  it  up  upon  the 
natural  foundation  of  raw  materials  in- 
creased the  productivity,  saved  transpor- 
tation goods,  and  met  the  special  needs  of 

finished-goods   manufacture.     German  in- 

66 


HUGO  STINNES 

dustry  could  not  afford  to  have  friction 
and  opposition  between  its  industrial  enter- 
prises. A  certain  amount  of  speculation 
was  inevitable  but  this  did  not  attain  large 
proportions. 

War  and  revolution  have  not  improved 
the  industrial  situation  of  the  German 
people.  Losses  in  population,  territory, 
and  materials  have  been  very  great.  Ex- 
ports and  imports  have  also  been  curtailed, 
and  besides  this,  the  heavy  mortgages  of 
the  treaty  of  peace  on  which  both  interest 
and  capital  must  be  paid,  weigh  heavily 
upon  German  industry.  Billions  of  paper 
marks  and  much  theoretical  discussion 
have  not  been  of  the  slightest  help  in  rais- 
ing production.  Germany  must  produce  in 
order  to  live,  and  must  produce  more, 
better,  and  cheaper  goods  than  before. 

Thus  the  combination  of  industry  has 
become  inevitable.  The  elasticity  with 
which  alterations  and  consolidations  are 
being  carried  out  is  astonishing.  This  is 
partly  achieved  by  technical  and  industrial 

^1 


HUGO  STINNES 

methods.  The  scarcity  of  coal,  for  instance, 
has  led  industries  to  adopt  lignite  to  an  ex- 
tent previously  considered  impossible.  Pe- 
troleum is  beginning  to  be  utilized  to 
an  astonishing  degree.  New  methods  of 
chemical  production  are  being  invented 
every  day.  The  discovery  and  application 
of  new  methods  promise  very  interesting 
results.  The  expensive  experiments  neces- 
sary for  this  development  are  being  made 
in  the  field  where  a  high  degree  of  industrial 
combination  has  already  taken  place. 

The  introduction  of  better  industrial 
management  and  new  forms  of  economic 
organization  is  also  helping  to  increase  and 
improve  production.  But  industrial  man- 
agement, plans  for  socializing  industries, 
and  industrial  councils,  are  all  schemes 
about  which  there  is  still  very  little  agree- 
ment. In  the  meanwhile,  the  consolidation 
movement  is  making  headway.  There  are 
very  few  isolated  factories  left.  In  some 
branches  of  industry,   isolated  enterprises 

have  entirely   disappeared.     German   na- 

68 


HUGO  STINNES 

tional  industry  is  gradually  becoming  a 
multicellular,  but  unified  industrial  body. 
The  art  of  management  is  becoming  an 
exact  science,  and  the  whole  process  ot 
production  is  becoming  an  organized  cycle 
under  the  direction  of  a  single  mind. 

This  development  has  made  most  prog- 
ress among  the  consolidated  industries, 
where  the  horizontal  and  vertical  systems 
of  industrial  organization  were  first  invented 
and  applied.  The  horizontal  system  seeks 
to  apply  the  most  rational  and  highly  spe- 
cialized methods  to  some  particular  stage 
of  the  manufacturing  process  after  it  has 
been  brought  together  under  a  unified 
management  and  carries  the  process  of 
standardization  to  the  furthest  possible 
stage.  Thus  the  competitive  struggle  be- 
tween factories  engaged  in  the  same  process 
is  either  lessened  or  altogether  abolished, 
and  the  technical  connection  with  the  next 
stage  of  manufacture  is  made  with  much 
less  waste  and  friction. 

The  vertical  system  seeks  to  unite  the 

69 


HUGO  STINNES 

whole  manufacturing  process  under  the 
same  management,  and  to  start  the  raw 
material  on  a  cycle  in  which  it  is  progres- 
sively manufactured  until  it  emerges  as  the 
finished  article.  Every  stage  of  the  process 
must  be  controlled  and  coordinated  with 
the  succeeding  stage.  Thus  for  example, 
the  process  would  run  from  coal  and  ore 
through  pig  iron,  steel,  casting,  to  tools, 
machines,  and  electro-technical  equipment. 

The  Rhine-Elbe-Union  already  shows  a 
vertical  combination  having  many  stages; 
production  of  the  raw  material,  such  as  coal, 
ore,  and  limestone;  production  of  inter- 
mediary products  such  as  iron  and  steel; 
production  of  semi-manufactured  materials 
such  as  forged  iron,  cast-iron,  tin,  wire, 
and  tubing;  production  of  the  finished 
goods  such  as  tools,  screws,  rivets,  springs, 
ironwork  parts,  railway  material,  and  parts 
for  vehicles  and  ships.  This  is  an  excellent 
example  of  the  vertical  system. 

The  first  concern  of  such  a  system  must 

be  to  make  sure  of  its  supply  of  the  raw 

70 


HUGO  STINNES 

materials,  especially  of  coal.  Since  the 
end  of  the  war,  coal  has  acquired  a  scarcity 
price.  All  the  factories  are  fighting  for 
coal.  Germany,  formerly  one  of  the  rich- 
est coal-bearing  countries,  does  not  possess 
enough  coal  fuel  for  its  industries.  The 
distribution  is  supervised  by  the  State,  but 
it  is  impossible  to  keep  the  factories  sup- 
plied. The  German  factories  have  had  to 
have  recourse  to  the  expensive  importa- 
tion of  foreign  coal.  For  this  reason  the 
Rhine-Elbe-Union  has  been  straining  every 
effort  to  secure  an  adequate  supply  of  coal 
for  its  factories.  The  same  thing  holds 
good  for  ores.  Where  the  company  has 
not  got  enough  coal  mines  in  the  immediate 
vicinity,  further  mines  have  to  be  acquired. 
Since  the  German-Luxemburg  Mining  & 
Smelting  Company  acquired  the  Union 
Company  of  Dortmund,  it  has  opened  sev- 
eral mines  in  the  Dortmund  district.  As 
already  pointed  out,  it  sought  to  compen- 
sate for  its  own  insufficient  coal  supply 
since    the    war,    by    combining    with    the 

6  71 


HUGO   STINNES 

Gelsenkirchen  Mining  Company,  Inc.,  and 
this  company  in  turn  found  it  profitable 
to  enter  the  combination  because  this  would 
lead  to  the  extension  of  the  mining  business, 
on  account  of  the  blast  furnaces  of  the 
German-Luxemburg  Mining  &  Smelting 
Company. 

Each  individual  production  stage  is  built 
up  in  relation  to  the  stage  above  and  below 
it  in  the  cycle  of  the  whole  production  proc- 
ess. The  finished-products  factories  are 
assured  of  the  necessary  material,  while  the 
factories  that  manufacture  the  intermedi- 
ate products  are  assured  of  a  sufficient  coal 
and  ore  supply  from  the  stage  below,  and 
at  the  same  time  can  easily  dispose  of  their 
products  to  the  next  stage  of  manufacture. 
The  geographical  concentration  also  sim- 
plifies cooperation  and  at  the  same  time 
renders  the  work  less  expensive,  while  the 
alignment  of  the  various  stages  of  manu- 
facture allows  the  individual  factory  to 
avoid   the   expensive   storage   of  materials 

and  supplies.    This  method  also  avoids  the 

72 


HUGO  STINNES 

time-robbing  selection  of  materials,  the  in- 
creased cost  due  to  the  middle-man,  and  the 
uncertainty  of  getting  the  right  materials. 

It  is  clear  that  an  enterprise  of  this  sort 
can  produce  better  goods  in  greater  volume, 
than  an  isolated  factory.  The  use  of  its 
own  products,  the  decrease  in  its  mainte- 
nance cost,  and  its  strategic  industrial  posi- 
tion allow  it  to  grow  faster  than  other  en- 
terprises. We  are  therefore  witnessing  a 
concentration  race  in  the  German  industry 
of  to-day,  especially  in  the  mining  industry. 
Only  a  few  large  enterprises  remain  un- 
consolidated. The  old  firms  of  Klöckner, 
Stumm,  Haniel,  Funke,  Thyssen,  Stinnes, 
and  others,  are  growing  into  gigantic  com- 
binations which  are  constantly  drawing 
more  closely  together. 

A  few  months  after  it  was  formed,  the 
Rhine-Elbe-Union  was  enlarged  through 
the  acquisition  of  the  Bochum  Company, 
engaged  in  mining  and  cast  steel  manu- 
facturing. This  plant,  which  represents  an 
extensive  combination  in  the  Rhine- West- 

n 


HUGO  STINNES 

phalian  district,  has  been  in  existence  for 
sixty  years.  It  includes  blast  furnaces, 
steel  smelters,  foundries,  hammer  and  mill 
works,  and  factories  for  manufacturing 
railroad  material,  as  well  as  a  large  number 
of  subsidiary  plants.  As  many  as  18,000 
hands  are  employed.  The  Company  pro- 
cures the  greater  part  of  its  raw  materials 
through  the  operation  of  its  own  mines, 
coke  plants,  quartz  mines,  and  limestone 
fields.  It  also  owns  a  network  of  iron-ore 
mines  in  the  ore  district  bordering  on  the 
Sieg  River. 

Before  the  Bochum  Company  joined  "the 
Rhine-Elbe-Union  it  went  through  a  curious 
experience  on  the  stock  exchange.  A  Ber- 
lin banker  attempted  to  buy  up  the  shares 
of  the  Bochum  Company  on  the  stock  ex- 
change, causing  a  series  of  fantastic  price 
fluctuations.  When  this  speculator  had 
accumulated  a  majority  control  of  the  Com- 
pany, he  began  to  look  about  for  a  pur- 
chaser. The  rumor  had  been  spread  that 
foreign  interests,  taking  advantage  of  the 

74 


HUGO  STINNES 

exchange  situation,  were  seeking  to  acquire 
the  Company.  The  Bochum  Company 
might  easily  have  shared  the  fate  of  the 
Phönix  Company,  and  other  German  enter- 
prises. At  this  point,  the  Stinnes  group 
decided  to  acquire  the  Company  despite 
the  artificially  high  price.  A  purchase 
price  was  agreed  upon  and  the  speculation 
came  to  an  end.  The  whole  episode  was 
an  exception  rather  than  the  rule,  for  Ger- 
man industry  is  rarely  subjected  to  such 
purely  financial  operations. 

The  acquisition  of  the  Bochum  Company 
was  of  crucial  importance  to  the  Rhine- 
Elbe-Union  for  perfecting  its  plan  for  manu- 
facturing intermediary  and  finished  prod- 
ucts. Its  negotiations  with  the  refined-steel 
factory  of  Böhler  Brothers  &  Company  was 
a  step  in  the  same  direction. 

Mining  enterprises  lead  not  only  to  the 
metal  industries,  but  to  the  electrical  in- 
dustry as  well.  Both  of  these  industries 
had  attracted  the  attention  of  Stinnes.    He 

75 


HUGO  STINNES 

Intended  the  Rhine- Westphalian  Electrical 
Company  to  supply  the  two  industrial 
provinces  of  Rhineland  and  Westphalia. 
These  two  provinces  are,  of  course,  thickly 
studded  with  innumerable  factories,  elec- 
trical distributing  stations,  power  houses, 
gas  and  electrical  plants,  railroad  stations, 
and  trade  centres,  not  to  mention  hundreds 
of  municipalities,  with  their  network  of 
railroads  and  street  car  systems,  all  of  which 
consume  light  and  power.  By  1920  the 
Company  had  undergone  considerable  ex- 
pansion through  the  acquisition  of  power 
houses  and  new  districts  requiring  elec- 
trical service.  Its  supply  of  raw  materials 
was  covered  by  an  agreement  with  the 
Rhine  Lignite  Works  at  the  Rodder  mine. 
A  further  supply  of  lignite  comes  from  the 
mines  of  A.  Riebeck  in  Middle  Germany, 
as  well  as  from  the  lignite  mines  in 
Brunswick. 

The  Stinnes  Trust  thus  rounded  off  its 
mining  interests  at  both  ends  through  its 

consolidation  with  the  German-Luxemburg 

76 


HUGO  STINNES 

Mining  and  Smelting  Company,  and  the 
Gelsenkirchen  and  Bochum  Companies. 
The  next  step  followed  in  the  same  year. 
In  1920  Hugo  Stinnes  consolidated  his 
mining  business  with  the  Siemens  Company 
in  order  to  form  a  gigantic  electro-mining 
industry. 

The  Siemens  Company  began  its  career 
in  a  small  workshop  which  Werner  Siemens 
started  in  1847,  in  an  obscure  location  in 
Berlin.  From  these  humble  beginnings 
Siemens  and  his  partner  Halske  developed 
a  great  telegraph  and  cable  construction 
company.  This  company  built  and  in- 
stalled the  entire  Russian  telegraph  system. 
One  of  the  outstanding  characteristics  of 
the  Siemens  family  is  its  love  of  independ- 
ence. Thus  for  example,  Werner  Siemens 
for  many  years  opposed  the  transformation 
of  the  firm  into  a  corporation,  so  that  this 
step  was  not  taken  until  1897. 

This  year  marks  the  beginning  of  a  great 
development.  The  company  assumed  gi- 
gantic proportions.     The  severe  panic  of 

77 


HUGO  STINNES 

1900,  which  played  havoc  with  the  elec- 
trical industry,  threatened  a  number  of 
the  larger  electrical  companies,  which  had 
become  involved  in  some  very  risky  ven- 
tures. The  great  electrical  company  of 
Siemens  and  the  A.  E.  G.  (Allgemeine 
Elektrizitäts-Gesellschaft)  were  the  only 
ones  that  remained  unshaken.  The  others, 
in  so  far  as  they  continued  to  function  at 
all,  had  to  seek  support  from  these  two. 
At  that  time  the  consolidation  of  the 
Siemens  Company  with  the  Nürnberg  Elec- 
trical Company  (formerly  Schuckert  & 
Company)  took  place.  These  two  com- 
panies formed  the  subsidiary  Siemens- 
Schuckert  Company  for  the  purpose  of 
developing  methods  of  high  power  trans- 
mission. A  number  of  other  companies 
were  likewise  formed  in  connection  with  the 
Siemens  enterprise. 

The  Company  supplies  a  remarkable 
number  of  consumers,  including  electric 
and  gas  companies,  electric  mining  plants, 
and  subsidiary  railroads  of  all  kinds.  Among 

78 


HUGO  STINNES 

these  are  the  Franckonian  transmission 
station,  the  high  power  houses,  Franken 
and  Thüringen;  the  estabhshment  of  Kupf- 
erdreh; the  distributing  station,  Südharz; 
the  A.  G.  Wiener  Lokalbahn  Co. ;  the  Rhine 
Electrical  Company  of  Mannheim;  the  local 
Berg  Railroad;  the  Hamburg  and  Stettin 
Electrical  Companies,  the  electrical  street 
railway  systems  of  Elberfeld,  Barmen, 
Würzburg,  and  so  forth.  The  Company  is 
also  interested  in  machine  and  automobile 
factories,  as  well  as  in  other  factories  at 
home  and  abroad. 

The  products  of  the  Siemens  Company 
comprise  electrical  manufactures  and  equip- 
ments of  all  sorts,  from  incandescent  lamps 
to  subways.  It  also  manufactures  general 
machinery,  fine  mechanical  and  optical  in- 
struments, and  other  instruments  of  all 
sorts,  as  well  as  automobiles  and  automobile 
trucks. 

It  is  noteworthy  that  the  Stinnes  Trust, 
as  in  the  case  of  the  Gelsenkirchen  Mining 
Company,  Inc.,  did  not  effect  the  consolida- 

79 


HUGO   STINNES 

tlon  with  the  Siemens  Company  through 
any  financial  operation,  but  through  direct 
negotiations.  Mutual  necessity  and  the 
prospect  of  joint  benefits  probably  played 
quite  as  large  a  role  as  the  personality  of 
Stinnes  and  his  gift  for  organizing. 

This  electro-mining  company  is  called  the 
"  Siemens-Rhine-Elbe-S  c  h  u  c  k  e  r  t-Union." 
This  pivotal  organization  regulates  the 
financial  affairs  of  all  the  related  companies, 
and  works  out  the  plans  for  a  joint  adminis- 
tration. But  the  intention  is  to  keep  the 
management  and  the  administration  of  each 
member  independent.  The  object  of  the 
consolidation  was  described  as  follows,  by 
the  chairman  of  the  board  of  directors  of 
the  Siemens-Halske  Company:  "In  these 
days,  where  nothing  is  left  to  us  except 
intelligent  and  highly  trained  workers,  we 
must  see  to  it  that  everything  that  we  can 
extract  from  our  soil  does  not  reach  the 
markets  of  the  world  until  it  has  been 
partly  or  entirely  manufactured  by  our  own 
labor." 

80 


HUGO  STINNES 

This  huge  company,  with  its  200,000  em- 
ployees, is  in  a  position  to  experiment  with 
power-saving  devices,  radical  innovations, 
and  opportune  expansions  as  well  as  to 
introduce  methods  of  specialization  and 
standardization.  This  is  one  of  the  great 
advantages  of  concentrated  effort. 

The  consolidation  of  the  Siemens  Com- 
pany with  the  great  mining  interests  having 
been  effected,  it  remains  for  us  to  follow 
the  further  development  of  its  great  com- 
petitor, the  Allgemeine  Elektrizitäts-Gesell- 
schaft. Here  also  we  already  see  the  be- 
ginning of  vertical  combination.  By  virtue 
of  its  connections,  especially  with  the 
Rhine-Westphalian  industrial  district, 
which  is  a  large  consumer,  the  Siemens 
Company  will  enjoy  extraordinary  advan- 
tages in  regard  to  its  supplies  as  well  as  the 
disposal  of  its  products.  It  is  equally  cer- 
tain that  the  future  plans  of  the  Stinnes 
Trust,  which  are  already  looking  beyond  the 
boundaries  of  Germany,  will  be  of  the  great- 
est importance  for  the  electrical  industry. 

81 


HUGO  STINNES 

In  order  to  round  out  the  company, 
Stinnes  has  also  begun  affiliations  with 
certain  metal  works  such  as  copper  and 
brass  factories,  which  are  of  great  im- 
portance for  the  electrical  industry,  and 
has  also  become  interested  in  aluminum 
plants.  In  addition,  he  has  brought  the 
automobile  industry  within  his  sphere, 
through  the  purchase  of  the  Loeb  auto- 
mobile factory  in  Berlin. 

According  to  the  agreement,  the  members 
of  the  Siemens-Rhine-Elbe-Schuckert-Union 
are  merged  together  into  a  homogeneous  or- 
ganization, to  last  until  the  year  2000.  The 
time  seems  to  have  arrived  when  individu- 
als can  plan  industrial  combinations  for 
centuries  ahead. 


CHAPTER  VII 


STINNES'     AFFILIATIONS     IN     GERMANY    AND 

ABROAD 


The  Stinnes  Trust  has  grown  from  the 
Rhine-Westphalian  industrial  district  until 
it  extends  over  the  whole  of  Germany. 
Through  the  Siemens-Schuckert  Company, 
it  has  gained  a  foothold  in  the  most  im- 
portant industrial  cities  of  Bavaria.  At 
the  time  of  the  consolidation,  the  combined 
directorates  made  a  statement  in  which 
they  pointed  out  the  economic  and  political 
importance  of  this  event.  They  declared 
that  Bavaria  and  Berlin  are  combining 
with  Rhineland  and  Westphalia  to  form  a 
firmly  knit  economic  unity  which  is  des- 
tined to  counteract  every  attempt  at  separ- 
ation. The  sentiment  of  these  German 
industrial  leaders  was  echoed  on  another 

83 


HUGO  STINNES 

occasion  by  the  forces  of  labor.  In  the 
summer  of  1920,  at  a  conference  of  labor 
union  delegates  from  all  the  mines,  a  resolu- 
tion was  passed  pledging  the  men  to  joint 
action  with  the  labor  organizations  of  the 
railroads  and  water  highways,  to  cut  off  the 
supply  of  coal,  coke  and  briquettes  from 
any  part  of  the  country  which  should  at- 
tempt to  secede  from  Germany. 

In  view  of  the  weakness  of  the  present 
Germ„an  state  authority,  these  economic 
arguments  are  of  great  importance  when 
facing  the  danger  of  isolation  and  secession. 

Aside  from  its  success  in  South  Germany, 
the  Stinnes  Trust  has  recently  obtained  a 
strong  foothold  in  the  most  important 
industrial  sections  of  Prussia.  It  controls 
the  importation  of  coal  and  the  coal  market, 
and  shares  in  the  distribution  of  machines 
and  manures  for  the  agricultural  operations 
of  East  Prussia.  It  has  acquired  an  almost 
monopolistic  position  in  the  manufacture 
of  cellulose,  one  of  the  chief  products  of 
this  region.    All  the  cellulose  factories  of 

84 


HUGO   STINNES 

East  Prussia,  which  is  rich  in  forests,  arc 
under  the  Stinnes  control. 

Hugo  Stinnes  also  turned  his  attention 
to  German  Austria.  This  country  cannot 
continue  to  exist  for  any  length  of  time 
without  a  close  economic  affiliation  with  an 
economically  strong  foreign  country.  It 
will  soon  have  to  decide  in  what  direction 
this  is  to  take  place.  After  a  long  period 
of  paralysis  and  impotence,  German  Aus- 
tria is  making  frantic  efforts  to  take  care 
of  its  economic  future.  The  industries  are 
being  transformed  and  are  adapting  them- 
selves to  altered  conditions  of  production. 
The  attempt  is  being  made  to  replace  the 
antiquated  and  only  partly  active  factories 
with  modern  plants,  and  to  use  the  coun- 
try's untapped  sources  of  energy.  Austrian 
territory  is  being  examined  for  deposits  of 
coal,  oil,  natural  gas,  and  chemicals. 

The  severance  of  the  Danube  states  from 
Austria,  in  accordance  with  the  treaty,  has 
caused  a  number  of  vital  industries  to  come 
under  foreign  jurisdiction.     German  Aus- 

85 


HUGO  STINNES 

tria  can  no  longer  count  on  these  nor  on 
any  other  foreign  industries.  Her  mori- 
bund exchange  does  not  permit  her  to  im- 
port as  formerly,  and  is  allowing  foreign 
countries  to  buy  up  Austrian  industries  to 
an  alarming  extent. 

Yet,  despite  her  present  weakness,  Aus- 
tria is  rich  in  economic  possibilities.  In 
Upper  Austria,  in  Salzburg  and  in  the  Tyrol, 
there  are  coal  deposits;  oil  seems  to  be  pres- 
ent in  various  localities,  and  valuable  de- 
posits of  kaolin,  or  porcelain-earth,  which 
may  form  the  basis  for  a  highly  developed 
porcelain  industry.  There  are  sufficient 
forests  to  support  a  flourishing  paper- 
making  industry.  The  use  of  water  power 
would  put  the  electrical  industry  on  its 
feet,  and  the  power  thus  developed  could 
furnish  the  entire  mechanical  energy  for 
industrial  and  transportation  purposes.  In 
the  spring  of  1921,  the  Stinnes  Trust  ac- 
quired the  Austrian  Alpine  Mining  Com- 
pany, by  buying  up  the  stock.  This  com- 
pany owns  the  Styrian  mining  deposits,  the 

86 


HUGO  STINNES 

greatest  mine  of  Europe,  and  used  to  play 
an  important  part  before  the  war  in  sup- 
plying Italy  and  the  Balkans  with  iron  and 
steel.  In  1916,  the  best  year  of  the  mine, 
2,360,000  tons  of  ore  were  mined,  yielding 
637,000  tons  of  pig  iron,  and  300,000  tons 
of  rolled  steel.  After  the  war,  the  produc- 
tion was  greatly  diminished.  In  1919  the 
production  had  dwindled  to  244,000  tons 
of  ore,  yielding  59,000  tons  of  pig  iron  and 
70,000  tons  of  rolled  steel,  which  represents 
about  one-tenth  of  the  former  production. 

When  things  were  at  their  lowest  ebb, 
a  Viennese  banker  bought  the  majority 
stock  control,  and  sold  the  greater  part  of 
it,  with  enormous  profit,  to  an  Italian  syndi- 
cate. This  acquisition  was  of  great  im- 
portance for  Italy.  The  Italian  industry, 
with  little  iron  to  fall  back  upon  in  its  own 
country,  was  now  in  a  position  to  secure  its 
iron  supply  from  Styria.  The  idea  was  an 
excellent  one,  but  conditions  made  it  im- 
possible to  carry  it  out.     For  Italy,  with 

hardly  any  coal  of  its  own,  could  not  furnish 

7  87 


HUGO   STINNES 

the  necessary  coke  to  refine  the  ore.  The 
Italians  controlled  the  mine  for  almost  two 
years  without  extracting  a  single  ounce  of 
iron. 

Besides  the  lack  of  coke,  the  Italian  syndi- 
cate also  faced  a  lack  of  labor.  Formerly, 
any  amount  of  Italian  laborers  were  to  be 
had  to  run  the  industry,  but  they  now  en- 
tirely abstained  from  coming,  which  is 
quite  natural,  since  no  Italian  could  be  in- 
duced to  work  to-day  for  wages  paid  in 
Austrian  crowns.  On  the  other  hand,  the 
syndicate  was  in  no  position  to  pay  wages 
in  Italian  lire. 

The  Austrian  company  formerly  had  ob- 
tained the  greater  part  of  its  coke  from  its 
own  coke  plants  in  Orlau  near  Ostrau  in 
Moravia,  as  well  as  from  other  Moravian 
coke  plants,  and  from  the  Ruhr  coal  dis- 
trict. The  States  that  came  into  existence 
through  the  fall  of  Austria  erected  trade 
barriers  against  each  other,  so  that  the 
deliveries    of   coke    from    Czecho-Slovakia 

also  ceased.    The  deliveries  from  the  Ger- 

88 


HUGO  STINNES 

man  district  likewise  became  small  and 
intermittent.  As  a  result  of  this  situation, 
the  company  was  compelled  to  make  an 
extremely  unfavorable  reciprocal  agreement 
with  Czecho-Slovakia,  according  to  which 
the  original  Austrian  company  had  to  de- 
liver pig  iron  in  exchange  for  coke.  But  the 
coke  delivery  became  so  inadequate  that 
six  of  the  seven  blast  furnaces  soon  had  to 
be  banked. 

The  acquisition  of  the  enterprise  by  the 
Stinnes  Trust  foreshadows  a  great  change, 
and  is  of  the  greatest  importance  for  the 
Styrian  deposits  as  well  as  for  the  entire 
problem  of  the  economic  reconstruction  of 
German  Austria.  The  Stinnes  Trust,  which 
controls  iS-8%  of  the  entire  coal  produc- 
tion of  Rhine- Westphalia,  and  13%  of  its 
entire  coke  output,  is  in  a  position  to  supply 
all  the  coke  necessary  to  run  the  blast  fur- 
naces at  full  capacity,  the  annual  coke 
requirement  being  600,000  tons.  The  in- 
creased production  of  pig  iron  is  of  vital 
importance  in  reviving  the  industries  which 

89 


HUGO  STINNES 

depend  upon  iron.  Under  this  arrange- 
ment the  iron  produced  at  the  Styrian  mines 
no  longer  has  to  be  taken  to  Czecho- 
slovakia, but  is  manufactured  right  in  the 
country.  This  means  a  resumption  of  the 
Austrian  iron  industry,  so  that  it  can  satisfy 
the  home  demand,  and  at  the  same  time 
resume  the  export  of  iron.  The  excep- 
tional quality  of  Styrian  iron  has  played  an 
important  part  in  handicapping  Austrian 
iron  manufactures.  The  iron  imported 
after  the  closing  down  of  the  mine  was  not 
always  of  the  quality  which  the  Austrian 
industries  required  for  their  high  grade 
steel  products.  With  the  Styrian  iron 
once  more  at  their  command,  they  are  now 
again  in  a  position  to  supply  the  market 
with  goods  of  standard  quality. 

Hugo  Stinnes  has  been  criticized  in  some 
quarters  for  acquiring  the  Alpine  Mining 
Company.  The  transaction  occurred  in  the 
critical  days  of  the  London  conference. 
The  purchase  required  large  financial  re- 
sources and  was  looked  upon  as  a  measure 

90 


HUGO  STINNES 

calculated  to  increase  the  difficulty  of  an 
understanding.  It  may  very  well  be  that 
the  impression  made  in  London  was  not 
very  favorable,  but  the  loss  of  the  ore  de- 
posits would  certainly  have  been  a  much 
greater  calamity.  This  loss  was  actually 
threatened  because  negotiations  with  foreign 
purchasers  had  already  begun,  as  in  the  case 
of  the  Bochum  Company  where  the  stock 
was  almost  bought  up  by  foreign  investors. 

Austria  would  not  have  been  in  a  position 
to  put  this  gigantic  mining  enterprise  into 
operation  again  without  outside  help.  The 
Kölnische  Zeitung,  (the  leading  paper  of 
Cologne),  discussed  the  importance  of  the 
case,  in  relation  to  the  economic  strangu- 
lation of  Germany  and  Austria,  as  follows : 

''The  post-war  policy  of  the  Entente  is 
severely  handicapping  German  industry, 
and  is  excluding  it  from  the  world  market 
wherever  possible.  It  is  transforming  Aus- 
tria-Hungary into  a  heap  of  wreckage,  and 
is  paralyzing  Upper  Silesia  to  the  point  of 

industrial    impotence.      The    Entente    has 

91 


HUGO  STINNES 

abandoned  the  utterly  helpless  Balkans, 
and  has  nothing  to  contribute  to  the  recon- 
struction of  Central  Europe  except  insen- 
sate reparation  demands,  penalties,  and 
reprisals.  It  has  converted  the  'urge  to  the 
southeast '  which  it  formerly  falsely  ascribed 
to  us,  into  an  irresistible  pressure.  An 
enterprising  man  like  Stinnes,  whose  fore- 
sight and  largeness  of  conception  even  his 
enemies  will  not  deny,  is  taking  a  leap  into 
the  dark  with  the  hope  of  transforming  one 
of  the  greatest  enterprises  of  the  continent 
into  an  active  member  of  European  industry. 
The  capital  involved  is  no  trifle  even  for 
Stinnes,  and  the  risk  is  proportionately  large. 
Yet  this  step  has  brought  down  the  wrath  of 
the  Entente  upon  Stinnes,  though  none 
moved  a  finger  as  long  as  exploiters  from 
every  country  in  the  world  tried  to  share  in 
the  auctioning  off  of  Austria.  When  we 
consider  that  Italy,  a  former  ally,  had  the 
first  chance,  but  was  not  able  to  accom- 
plish anything,  and  that  Schneider-Creusot, 
made  wiser  by  unfortunate  experiences  in 

92 


HUGO  STINNES 

the  case  of  the  Skoda  works,  left  the  field 
open  to  German  industry,  it  is  really  hard 
to  see  how  Stinnes  deserves  any  reproach. 
The  Entente's  policy  of  economic  encircle- 
ment of  Germany  cannot  ignore  the  fact 
that  there  are  limits  to  these  destructive 
tendencies." 

The  acquisition  of  the  Alpine  Mining 
Company  by  the  Stinnes  Trust  has  thus 
far  been  the  only  practical  step  towards 
the  union  of  Austria  and  Germany,  and  has 
caused  a  great  stir  in  German  Austria. 
This  is  brought  out  in  an  open  letter  which 
a  Viennese  journalist  at  that  time  addressed 
to  Stinnes.    He  wrote  as  follows: 

*'You  have  attempted  to  revive  the 
stricken  economic  condition  of  German 
Austria  with  your  financial  resources,  and 
have  found  the  point  at  which  the  greatest 
returns  may  be  expected.  Why  was  this 
step  so  long  in  coming  ?  We  on  the  German 
Austrian  side  have  been  indefatigable  for 
over  two  years  in  invoking  the  aid  of  Ger- 
man capital.    There  must  have  been  polit- 

93 


HUGO  STINNES 

ical  difficulties,  for  the  economic  advantages 
to  both  sides  were  obvious  to  everybody. 
But  the  ItaHan  purchasers  could  not  meet 
the  costs.  They  probably  hoped  that  their 
participation  in  the  Alpine  Mining  Company 
would  induce  the  Czecho-Slovaks  to  deliver 
the  coke  necessary  for  the  smelting  of  the 
Styrian  ore  in  larger  quantities,  after  they 
had  revengefully  denied  it  to  the  German 
Austrians.  But  the  Czecho-Slovaks  were 
not  to  be  disturbed  in  the  further  enjoy- 
ment of  their  revenge,  so  that  six  of  seven 
blast  furnaces  of  the  company  remained 
cold.  And  at  that  time  French,  English 
and  American  allied  interests  would  not 
furnish  coke,  except  at  exorbitant  prices. 
The  result  was  that  the  Italians  soon  lost 
their  enthusiasm  for  a  piece  of  property 
which  they  had  so  triumphantly  acquired. 

"You,  Mr.  Stinnes,  are  the  right  substi- 
tute for  them.  For  you  have  what  they 
lacked,  namely,  coal  and  coke.  It  is  prob- 
able that  the  thirst  for  vengeance  will  now 
also  rapidly  disappear  among  the  Czecho- 

94 


HUGO  STINNES 

Slovaks,  as  was  the  case  in  the  sugar  busi- 
ness, when  Austria  began  to  receive  sugar 
from  far  off  Java,  at  a  cheaper  price  than 
that  which  their  Czecho-Slovak  neighbors 
were  asking  for  it.  Subsequently,  the  price 
of  sugar  in  the  world  markets  declined  to 
such  an  extent  that  the  Czecho-Slovak 
sugar  could  not  be  sold  anywhere  at  their 
asking  price.  Let  us  hope  that  the  same 
thing  will  happen  with  their  coke.  They  will 
undoubtedly  offer  it  to  the  Alpine  Mining 
Company,  so  that  the  Westphalian  coke 
will  not  have  to  be  taken  away  from  Ger- 
man industry.  Next,  the  unemployment 
will  decrease.  More  hands  will  be  required 
in  order  to  mine  larger  quantities  of  iron- 
ore,  which  will  also  have  to  be  smelted, 
after  which  the  iron  will  be  used  in  the  fac- 
tories to  manufacture  machines,  girders, 
rails,  tools,  and  other  articles.  The  in- 
creased supply  will  cause  the  price  of  iron 
manufactures  to  come  down.  This  will  be 
followed  by  a  general  reduction  of  prices 
and  wages.    Then  there  will  be  a  gradual 

95 


HUGO  STINNES 

resumption  of  building  activity,  which  will 
stimulate  industry  all  along  the  line.  In 
short,  the  industrial  paralysis  will  cease,  and 
our  economic  life  will  again  have  a  healthy 
circulation. 

''For  this  reason,  Mr.  Stinnes,  the  Aus- 
trian press  is  again  suddenly  favorable  to 
you.  This  is  true  even  of  the  Social-Demo- 
cratic papers  which  have  recently  swung 
back  to  capitalism.  The  Social-Democratic 
party,  as  you  know,  has  been  in  a  repentant 
mood  ever  since  the  complete  collapse  of 
their  ambitious  socialization  plans  at  the 
recent  congress  of  the  metal  workers'  unions 
in  Vienna.  The  Social-Democratic  faction 
in  our  national  parliament  is  keeping  close 
watch,  and  has  made  an  interpellation  in 
parliament,  drawing  the  government's  at- 
tention to  the  possibility  of  your  shipping 
the  Styrian  ore  to  Germany,  and  thus 
paralyzing  the  Austrian  iron  industry.  But 
this  probably  merely  caused  you  to  smile, 
since  you  are  after  profits  which  will  be 

greatest  if  you  have  the  raw  material  manu- 

96 


HUGO  STINNES 

factured  as  much  as  possible  on  the  spot, 
instead  of  first  shipping  it  to  some  distant 
point. 

"You  must  also  have  been  highly  amused 
when  one  of  our  reactionary  yellow  journals 
expressed  the  opinion  that  you  had  ac- 
quired the  stocks  of  the  Alpine  Mining 
Company  for  the  sole  purpose  of  shutting 
down  the  works  for  the  benefit  of  the  Ger- 
man iron  industry.  This  was  undoubtedly 
a  case  of  deliberately  sowing  suspicion  for 
some  ulterior  motive.  For  you  would  have 
much  preferred  the  Italians  to  keep  the 
stocks  of  the  Company,  instead  of  selling 
them  to  you,  just  as  you  are  shedding  no 
tears  over  the  increasing  amount  of  foreign 
holdings  in  Austrian  banks  and  industries, 
on  the  part  of  Frenchmen,  Englishmen,  and 
Americans.  Let  them  all  continue  to  ac- 
quire such  holdings.  Those  of  us  who  de- 
sire the  reconstruction  of  Austria,  and  her 
close  cooperation  with  Germany,  welcome 
this  foreign  participation." 
The  step  which  Hugo  Stinnes  had  thus 

97 


HUGO  STINNES 

taken  is  fraught  with  great  risk,  for  he  has 
invested  a  gigantic  sum  and  will  have  to 
put  still  more  money  into  this  mining  enter- 
prise in  order  to  put  it  into  complete  run- 
ning order.  The  speculation  that  preceded 
this  step  will  make  it  extremely  difficult  to 
derive  any  profit  from  this  huge  investment, 
but  it  is  characteristic  of  Hugo  Stinnes  to 
build  his  business  without  always  having  in 
mind  the  question  of  immediate  or  early 
profit. 

While  taking  these  steps  in  the  south  and 
the  east,  Stinnes  was  thinking  of  still 
further  ways  of  keeping  open  the  economic 
gates  of  Germany.  Some  time  before  the 
war,  he  had  already  entered  into  compli- 
cated negotiations  for  the  purpose  of  con- 
necting his  enterprises  with  foreign  sources 
of  raw  materials  and  foreign  fields  of  con- 
sumption. His  purpose  was  to  have  a  cen- 
tralized enterprise,  producing  its  own  raw 
materials  for  its  own  transportation  lines, 

and  marketing  its  wares  through  its  own 

98 


HUGO  STINNES 

merchandising  system.  In  1920  he  added 
an  extensive  exporting  department  to  the 
Hugo  Stinnes  Transportation  and  Overseas 
Trading  Company,  organized  in  1917,  to 
which  reference  has  already  been  made. 

The  charter  of  this  company  in  the 
commercial  register  of  Hamburg  is  very 
interesting.  It  shows  how  the  varied  enter- 
prises of  Hugo  Stinnes  are  to  be  developed. 
The  business  is  licensed  to  engage  in  the 
following  activities:  To  engage  in  trans- 
portation of  every  description,  as  well  as  to 
build  and  manufacture  all  shipping  acces- 
sories, whether  at  home  or  abroad;  to  deal 
in  the  products  of  the  mining,  smelting, 
and  metal  industries,  the  chemical  and 
electrical  industry,  and  agriculture;  to 
market  articles  of  every  stage  of  manu- 
facture, as  well  as  raw  materials  of  all  kinds, 
especially  provisions  and  cattle  products, 
mineral,  animal  and  vegetable  oils,  cotton, 
and  other  textiles  in  the  unfinished  state, 
hides,  jute,  wood,  cellulose,  paper,  and  all 
products  of  the  intermediate  industries;  to 

99 


HUGO  STINNES 

engage  in  the  re-shipping  and  storage  of 
all  these  products,  especially  during  their 
transmission  from  or  to  foreign  countries. 
The  company  is  also  licensed  to  undertake 
the  extraction,  manufacture,  and  construc- 
tion of  every  form  of  raw  material  and 
manufactured  article  in  its  own  estab- 
lishments. 

It  is  difficult  to  imagine  a  more  compre- 
hensive industrial  organization.  Stinnes 
now  proceeds  from  the  mining  and  electrical 
business,  to  become  active  in  the  most 
varied  forms  of  German  business  enterprise. 
The  Hamburg  Travelers  Company,  which 
Stinnes  founded,  together  with  the  Ham- 
burg American  Line,  enters  the  field  of 
travel  and  hotel  and  health  resort  manage- 
ment. Steamer  cabins,  railroad  compart- 
ments, hotels,  and  health  resorts  are  uni- 
fied into  one  system.  The  company  owns 
the  Esplanade  Hotel  in  Berlin,  and  the 
hotels  in  Oberhof,  Thuringia,  which  are 
run  through  the  Hotel  Management  Com- 
pany, Limited,  of  Thuringia.    These  enter- 

100 


HUGO  STINNES 

prises  correlate  the  varied  possibilities  of 
the  traveling  and  tourist  business,  and  open 
up  the  prospect  of  world  travel  as  an  or- 
ganized enterprise.  The  route  from  the 
North  Sea  to  Central  Germany,  into  Switz- 
erland and  down  to  the  Mediterranean,  is 
likely  to  be  developed  first. 


CHAPTER  VIII 

STINNES   AND   THE    NEWSPAPERS 

There  was  much  astonishment  in  Germany 
when  it  became  known  that  Hugo  Stinnes, 
the  industrial  leader,  had  gone  into  the 
newspaper  business.  His  first  step  was  to 
acquire  the  well-known  Deutsche  Allgemeine 
Zeitung,  Stinnes  is  by  no  means  the  first 
German  industrial  leader  to  own  a  news- 
paper. It  is  pretty  well  established  that 
a  number  of  German  newspaper  properties, 
advertising  concerns,  and  news  bureaus, 
are  under  the  control  of  the  major  indus- 
tries. The  exact  connections  are  not  always 
clear.  This  state  of  affairs  reflects  upon 
the  whole  German  newspaper  system.  In 
many  organs  of  public  opinion,  it  is  true, 

I02 


HUGO  STINNES 

the  reader  can  easily  form  his  opinion  of 
the  influence  at  work  behind  a  newspaper. 
But  in  many  cases  even  an  experienced  per- 
son would  find  difficulty  in  doing  this.  The 
policy  of  a  newspaper  may  furnish  no  clew 
whatsoever,  so  that  it  is  only  by  accident 
that  the  identity  of  those  in  control  is  dis- 
covered. This  tendency  has  gone  so  far 
that  there  are  now  newspaper  proprietors 
who  possess  a  whole  string  of  different  pub- 
lications, with  widely  different  policies  to- 
wards political  and  economic  questions. 
These  papers  have  become  pure  business 
enterprises,  where  it  is  quite  immaterial 
to  those  in  control  whether  the  paper 
represents  this  or  that  shade  of  public 
opinion.  These  proprietors  look  upon 
newspapers  solely  from  the  point  of  view 
of   profit. 

Nowadays,  another  development  can  oc- 
casionally be  observed.  Men  formerly  en- 
gaged exclusively  in  the  newspaper  and 
advertising  business  suddenly  become  in- 
terested in  branches  of  industry  that  are 
8  103 


HUGO  STINNES 

entirely  removed  from  the  newspaper 
business. 

Nevertheless,  Hugo  Stinnes  seems  to 
present  a  special  case.  The  policies  of 
those  papers  that  are  demonstrably  under 
his  control  in  no  way  suggest  that  Hugo 
Stinnes  is  anxious  to  launch  any  propa- 
ganda in  favor  of  his  political  or  eco- 
nomic point  of  view.  Deeds  and  not 
words  reveal  his  influence.  It  is  just 
possible  that  he  bought  these  newspapers 
with  the  idea  of  influencing  the  press  in 
his  favor,  and  winning  some  of  his  pro- 
spective opponents  over  to  his  side.  But 
this  is  very  unlikely. 

Up  to  the  present,  the  operations  of 
Stinnes  in  this  field  greatly  resemble  his 
coal  and  electric  enterprises.  In  both  cases 
he  proceeds  from  an  economic  and  practical 
point  of  view.  The  connecting  link  be- 
tween his  newspapers  and  his  coal  business 
is  wood.  We  have  already  pointed  out  that 
he  had  acquired  extensive  forest  reserves 

in  order  to  assure  a  supply  of  mining  tim- 

104 


HUGO  STINNES 

ber.  The  possession  of  so  much  wood 
seems  to  have  suggested  the  production 
cycle  from  wood  pulp  to  newspapers,  ac- 
cording to  the  vertical  system.  This  as- 
sumption is  strengthened  when  one  sees 
how  he  has  fitted  the  various  stages  of  pro- 
duction between  wood  and  newspapers  into 
his  enterprises.  He  owns  factories  for  the 
manufacture  of  cellulose  and  paper,  and 
has  acquired  various  cellulose  factories  at 
the  headquarters  for  the  raw  material  in 
East  Prussia.  It  is  interesting  to  observe 
that  he  has,  at  the  same  time,  made  use  of 
his  coal  companies  in  order  to  make  sure 
of  having  an  uninterrupted  supply  of  coal 
from  the  Ruhr  basin  for  these  factories  in 
East  Prussia.  In  the  next  stage  of  paper 
manufacturing,  Stinnes  is  likewise  in  a 
position  to  fit  his  own  plants  into  the 
cycle.  It  is  rumored  that  the  Hugo  Stinnes 
Book  and  Cellulose  Company  is  seeking  to 
acquire  control  in  a  number  of  paper  fac- 
tories. His  acquisition  of  the  large  Büx- 
enstein Printing  Company  of  Berlin  and 

105 


HUGO  STINNES 

the  North  German  Book  Binding  and  Pub- 
lishing Company,  paves  the  way  to  the 
next  step  in  the  paper  industry.  The  whole 
enterprise  culminates  in  the  newspapers 
which  Stinnes  has  already  bought.  Here 
we  may  again  observe  the  same  economic 
cycle  from  the  raw  product  through  the 
intermediate  product  to  the  finished  ar- 
ticle, all  under  the  same  uniform  adminis- 
tration, as  in  the  case  of  the  other  enter- 
prises of  the  Stinnes  Trust. 

The  business  efficiency  of  Stinnes  makes 
it  seem  probable  that  he  will  also  attempt 
to  bring  his  newspapers  to  the  highest 
possible  stage  of  technical  and  administra- 
tive perfection.  Nevertheless  the  Deutsche 
Allgemeine  Zeitung  is  still  far  from  being  a 
journal  of  distinction,  comparable  let  us 
say,  to  the  French  Matin,  It  also  lacks 
the  millions  of  readers  who  support  news- 
papers of  such  world-wide  circulation. 
Judged  from  appearances  only,  it  is  true,  the 

Deutsche  Allgemeine  Zeitung  is  the  greatest 

io6 


HUGO  STINNES 

German  newspaper.  But  the  modest  cir- 
culation among  small  officials  which  this 
fussy  little  paper  formerly  enjoyed,  as  well 
as  under  the  excellent  management  of  the 
deceased  Mr.  Hobbing,  has  remained  the 
same.  Editorial  offices  and  experts  value  it 
as  before  for  its  information  service,  but 
the  paper  has  no  influence  on  any  larger 
sections  of  the  public.  With  all  his  news- 
paper purchases,  Stinnes  is  still  far  from 
being  a  Lord  Northcliffe,  and  probably  has 
no  intention  of  becoming  one. 

The  report  that  Stinnes  has  already  pur- 
chased sixty  German  papers  seems  to  be 
largely  exaggerated.  The  number  probably 
does  not  exceed  a  dozen  or  so. 

The  danger  of  a  trustification  of  the  press 
certainly  has  possibilities  which  must  not 
be  underestimated.  Powerful  personalities 
might  easily  use  their  economic  control  of 
the  press  in  order  to  sway  public  opinion  in 
certain  definite  directions,  and  to  misuse 
their  influence.     It  is  a  matter  for  legisla- 

107 


HUGO   STINNES 

tion  to  be  beforehand  in  checking  the 
dangers  that  might  result  from  such  a 
trustification,  with  its  attendant  conceal- 
ment of  the  nature  of  the  control  behind 
newspapers. 


CHAPTER  IX 

STINNES    IN   THE    PUBLIC    EYE 

Since  the  war,  Germany  has  had  to  fight 
for  its  very  existence.  This  struggle  is 
taking  place  primarily  in  the  field  of  eco- 
nomics. Formerly,  losing  a  war  entailed  the 
loss  of  territory  or  the  complete  loss  of  po- 
litical independence,  whereas  to-day  the 
consequences  of  such  a  war  are  a  confisca- 
tion of  goods ;  these  goods  are  either  taken 
out  of  the  defeated  country  in  the  form  of 
raw  materials  or  finished  products,  or  else 
the  same  result  is  accomplished  by  curtail- 
ing the  conquered  country's  share  in  the 
world's  trade  and  commerce,  in  favor  of  the 
victors. 

For  a  long  time  the  coal  question  re- 
mained in  the  foreground  of  the  peace  ne- 
gotiations.   France  had  lost  enormous  quan- 

109 


HUGO  STINNES 

titles  of  this  important  raw  material  through 
the  war.  It  will  take  years  before  the 
French  coal  mines  can  be  brought  back  to 
their  former  output.  This  explains  why 
France  was  so  interested  in  putting  the  de- 
mand for  German  coal  deliveries  into  the 
forefront  of  the  discussion.  But  even  a 
half-way  informed  opponent  must  have 
recognized  the  absolute  impossibility  of 
meeting  the  demand  for  the  enormous 
amount  of  almost  40,000,000  tons  of  coal, 
as  stipulated  in  the  treaty  of  peace.  At  the 
time  not  even  a  quarter  of  this  amount 
could  be  delivered.  It  is  true  that  the  out- 
put of  coal  from  the  Ruhr  basin  increased 
considerably  in  1919  and  1920.  But  it  was 
still  insufficient  to  supply  German  industry 
with  the  necessary  fuel. 

The  hostile  powers  saw  that  Germany 
could  not  be  compelled  to  deliver  the 
amount  of  coal  demanded,  by  means  of  any 
peremptory  command.  Since  the  days  of 
San  Remo,  they  seemed  to  realize  that  the 
only  possible  way  of  arriving  at  a  real  repar- 

IIO 


HUGO  STINNES 

at  ion  programme  was  by  resorting  to  nego- 
tiations. There  followed  the  conference  at 
Spa,  which  began  with  a  fair  prospect  of 
arriving  at  a  European  understanding, 
though  this  promise  ultimately  failed  to 
be  realized. 

The  negotiations  took  place  in  the  Villa 
Fraineuse,  the  former  seat  of  the  imperial 
headquarters.  The  French  delegates  seemed 
unable  to  dispense  with  the  florid  rhetoric 
which  characterizes  so  many  French  po- 
litical utterances.  The  German  delegates 
were  in  an  extraordinarily  difficult  position. 
The  amount  of  coal  demanded  of  them  was 
so  large  that  they  did  not  wish  to  take  the 
responsibility  of  accepting  it  without  fur- 
ther authorization.  They  therefore  sum- 
moned the  German  experts  to  Spa  in  order 
to  hear  their  opinions.  Hugo  Stinnes  was 
accordingly  summoned  to  Spa  to  testify  as 
an  expert. 

Opinion    among   the    German   delegates 

was  divided.     On  the  one  hand  they  were 

threatened    with    the    occupation    of   the 

III 


HUGO  STINNES 

Ruhr  basin,  but  on  the  other  hand,  they 
were  frightened  by  the  prospect  for  Ger- 
man industry  which  such  an  exhaustion  of 
Germany's  raw  materials  seemed  to  open 
up  before  them.  Hugo  Stinnes  anticipated 
such  catastrophic  results  from  accepting 
the  demand  of  the  Entente,  that  he  used 
the  entire  force  of  his  personaHty  and  his 
prestige  as  an  expert  to  insist  upon  a  re- 
fusal. The  delegates  decided  to  let  Stinnes 
present  his  arguments  personally,  at  a 
plenary  sitting  of  the  conference.  Mr. 
Hue,  representing  the  German  miners,  was 
also  present  as  an  expert,  and  was  equally 
convinced  of  the  serious  consequences  of  the 
loss  of  coal  to  Germany,  and  appeared  before 
the  conference  at  this  same  sitting  as  the 
representative  of  the  German  coal  miners 
in  order  to  state  the  grounds  for  his  adverse 
opinion. 

Stinnes  insisted  that  it  would  be  abso- 
lutely impossible  to  make  an  annual  de- 
livery of  40,000,000  tons.     He  recognized 

the  pressing  need  of  France  for  reparation 

112 


HUGO  STINNES 

coal,  but  considered  that  even  the  prelim- 
inary dehvery  of  2,000,000  tons  per  month 
could  not  be  carried  out  for  the  present.  A 
few  days  before,  he  had  already  made  a 
similar  declaration  to  a  representative  of 
the  French  press.  In  this  interview,  he 
stated  that  he  considered  the  Spa  confer- 
ence to  be  premature,  and  likely  to  turn 
out  a  failure  for  both  parties  concerned. 
He  was  in  favor  of  allowing  these  economic 
and  social  questions  to  mature  for  several 
months,  believing  that  many  of  them  would 
ultimately  solve  themselves.  He  further 
believed  that  Germany  would,  in  the  course 
of  time,  be  able  to  increase  its  labor  effi- 
ciency, and  that  it  was  ready  at  any  time 
for  international  cooperation. 

Stinnes  referred  particularly  to  the  possi- 
bility of  cooperation  between  France  and 
Germany.  The  fact  that  the  two  countries 
were  adjacent  was  a  direct  invitation  to 
carry  out  the  necessary  reconstruction  to- 
gether, and  to  satisfy  their  economic  needs 
on  the  basis  of  mutual  understanding.    But 

113 


HUGO  STINNES 

he  looked  upon  Spa  as  still  enveloped  in 
an  atmosphere  of  mutual  suspicion. 

The  arguments  of  Stinnes  before  the  con- 
ference were  heard  with  the  greatest  at- 
tention. The  delegates  saw  before  them  the 
representative  of  German  industry,  who  re- 
jected the  gestures  of  diplomacy  and  dealt 
with  sharp-edged  realities.  The  speech  of 
Mr.  Hue  strengthened  this  impression. 
These  speeches  marked  a  departure  in  the 
proceedings  of  these  political  negotiations. 
The  momentary  effect,  it  is  true,  was  not 
very  great.  The  guiding  stars  of  the  French 
and  English  statesmen  were  not  economic 
but  political.  It  was  made  evident  that  a 
memorandum  or  an  expert  opinion,  no  mat- 
ter how  carefully  and  thoroughly  composed, 
makes  little  impression  upon  men  of  the 
stamp  of  Briand  and  Lloyd  George,  who 
are  even  likely  to  dismiss  it  without  fur- 
ther consideration.  This  method  of  pre- 
senting the  German  arguments  was  out  of 
place,  at  least  as  far  as  any  immediate 

results  are  to  be  expected. 

114 


HUGO  STINNES 

Mr.  John  Maynard  Keynes,  the  EngHsh 
expert,  was  entirely  right  in  his  pessimism 
about  Spa.  He  expected  no  insight  from 
Spa  that  would  do  justice  to  the  reahties  of 
the  situation.  At  the  time  of  the  confer- 
ence at  Spa,  the  coal  question  was  no 
longer  an  economic  issue,  as  far  a^  the 
French  delegate  was  concerned,  but  a  polit- 
ical one.  If  Millerand  had  failed  to  satisfy 
the  French  public,  his  political  career  would 
have  ended.  England  on  the  other  hand, 
having  in  mind  certain  political  steps  in 
Asia  Minor,  for  which  it  was  necessary  to 
gain  French  approval,  was  compelled  to 
hold  back  from  any  practical  discussion. 
The  demands  of  France  were  put  through 
to  the  accompaniment  of  the  military 
threats  of  Marshal  Foch. 

The  utterly  impractical  nature  of  the 
reparation  negotiations  is  revealed  by  the 
fact  that  France  already  has  an  over- 
supply  of  coal,  despite  the  fact  that  the 
German  coal  deliveries  are  far  from  reach- 
ing the  amount  demanded  at  Spa.    At  the 

IIS 


HUGO  STINNES 

same  time,  the  reconstruction  work  is  being 
held  up.  A  distribution  of  German  effort, 
so  as  to  meet  the  actual  varied  require- 
ments of  France,  would  not  have  hampered 
Germany  as  much  as  these  coal  deliveries, 
and  would  have  been  of  much  greater 
benefit  to  France.  The  French  economic 
body  just  now  resembles  an  organism  which 
has  been  stuffed  to  the  bursting  point  with 
undigestible  nourishment. 

The  attitude  of  Hugo  Stinnes  at  Spa 
was  afterwards  sharply  criticized  in  Ger- 
many. He  was  accused  of  having  made 
such  a  curt  refusal  with  the  deliberate  in- 
tention of  bringing  about  the  occupation 
of  the  Ruhr  basin.  It  was  alleged  that 
this  would  have  meant  no  diminution  of 
his  profits.  It  was  also  hinted  that  he 
wanted  the  Ruhr  basin  to  be  in  French 
hands,  in  order  to  escape  the  German 
socialization  schemes.  The  answer  to  this 
is  that  Stinnes  certainly  could  have  found 
other  and  less  dangerous  alternatives  if  his 

actions  had  really  been  determined  by  mere 

ii6 


HUGO   STINNES 

considerations  of  profit  or  the  fear  of  social- 
ization. At  the  same  time  it  must  be  said 
that  Stinnes  seemed  to  be  of  the  opinion 
that  the  French  would  in  the  course  of 
time  undoubtedly  find  some  excuse  for  oc- 
cupying the  Ruhr  basin.  As  he  explained 
later  in  justifying  his  conduct  at  Spa,  he 
considered  that  the  results  would  have 
been  less  harmful  for  the  future  of  Germany 
if  the  occupation  had  taken  place  immedi- 
ately at  the  time  of  the  Spa  conference, 
rather  than  now  or  later. 

The  conference  at  Spa  was  preceded  by 
an  interview  between  Stinnes  and  Miller- 
and.  The  foreign  press  reported  that 
Stinnes  had  outlined  a  plan  of  close  co- 
operation between  the  French  and  German 
coal  and  iron  industries,  which  was  to  be 
of  the  greatest  importance  in  the  upbuilding 
of  German  economic  life.  His  plan  was 
supposed  to  have  been  worked  out  to  the 
most  minute  detail.  It  was  said  to  have 
made  a  strong  impression  in  France,  but 

that  the  French  industrial  leaders  had  op- 

117 


HUGO  STINNES 

posed  Stinnes'  proposal.  It  was  probably 
feared  that  such  a  cooperation  would  work 
out  to  the  detriment  of  French  industry 
on  account  of  the  superior  organization  of 
German  industries. 

The  pessimistic  calculations  of  Stinnes 
in  regard  to  the  coal  deliveries  have  turned 
out  to  be  untrue.  The  figures  were  prob- 
ably correct,  but  evolution  has  shown  that 
a  vital  organism  is  elastic  enough  to  form 
new  growths  where  the  old  growth  has 
been  cut  off.  Nevertheless  it  is  true  that 
the  experiment  was  never  carried  out  ac- 
cording to  the  figures  which  Stinnes  had 
in  mind.  The  insufficient  output,  despite 
extra  shifts,  subsidies,  and  an  increased 
number  of  laborers,  on  Germany's  part, 
and  the  transportation  difficulties  of  France, 
have  made  it  impossible  to  carry  out  com- 
pletely the  agreement  at  Spa. 

The    common    sense    harmony   between 

employers  and  employees  revealed  at  Spa, 

made  a  deep  impression  upon  the  public 

both  in  Germany  and  abroad.     But  the 

ii8 


HUGO  STINNES 

effect  of  this  soon  disappeared  in  Ger- 
many, when  political  and  labor  dissensions 
broke  out  with  unprecedented  severity  im- 
mediately after  the  occurrences  at  Spa. 
The  attacks  upon  Stinnes  came  thick  and 
fast.  Among  other  things,  he  was  accused 
of  seeking  to  acquire  influence  in  France 
in  order  to  limit  German  prerogatives  in 
the  Ruhr  basin,  and  to  split  labor  by  means 
of  his  newspapers.  A  letter  which  Hugo 
Stinnes  wrote  to  one  of  the  men  who  at- 
tacked him,  is  of  considerable  interest.  In 
July,  1920,  he  wrote  as  follows: 

"I  find  that  you  have  made  certain 
prominent  statements  in  the  Arbeiterzeitung^ 
of  Essen  to  which  I  am  replying  because 
they  have  been  made  by  a  man  who  is  a 
member  of  our  own  mining  industry,  and 
because  these  statements,  unless  they  are 
contradicted,  are  likely  to  cause  mischief 
in  our  mining  community.  The  experts 
of  the  coal  industry,  present  at  Spa,  had 


1 A  newspaper  devoted  to  the  interests  of  labor  published  in 
Essen. 

9  119 


HUGO  STINNES 

two  objects  in  mind  when  they  made  their 
fight  to  keep  the  compulsory  deHveries  of 
coal  to  the  hostile  Entente  within  certain 
limits.  They  wanted  first  to  save  the  Ger- 
man mining  unions  from  having  to  do  a 
great  amount  of  overtime  work  at  a  period 
when  their  food  supply  was  inadequate. 
In  the  second  place  they  did  not  want  the 
unions  to  assume  the  responsibility  for  an 
even  greater  increase  of  unemployment  and 
want  in  all  other  industries. 

In  the  discussions  of  the  socialization 
commission,  and  in  the  committee  of  the 
State  Economic  Council,  I  called  particu- 
lar attention  to  the  fact  that,  contrary  to 
many  of  my  associates,  I  did  not  take  the 
stand  that  the  abolition  of  the  eight-hour 
day  could  be  looked  upon  as  a  cure-all  to 
remedy  the  present  depression  within  what 
might  be  called  a  reasonable  time.  It  is 
therefore  outrageous  of  you  to  accuse  me 
of  having  taken  the  opposite  position.  The 
only  correct  statement  you  make  is  that  I 

declared  that  overtime  work  was  essential 

1 20 


HUGO  STINNES 

to  change  the  present  conditions  in  the 
departments  of  mining,  agriculture,  and 
transportation.  What  you  say  about  a 
French-German  Purchasing  Company,  in 
Paris,  in  which  I  am  supposed  to  be  heavily 
interested,  is  either  a  careless  or  a  dehberate 
misrepresentation  on  your  part.  For  it 
has  been  constantly  emphasized  that  only 
the  German  unions  and  the  Coal  Syndicate 
were  to  benefit  from  this  French-German 
Purchasing  Company.  This  was  again 
brought  out  at  the  recent  congress  of 
mining  unions.  If  it  is  your  intention  to 
create  a  dissension  and  suspicion  between 
employers  and  employees  in  the  coal  mining 
industry,  whether  through  ignorance  of  the 
facts,  or  deliberately,  you  are  merely  fur- 
thering the  interests  of  our  common  op- 
pressors, with  the  result  that  the  Rhine- 
Westphalian  miners  will  have  to  drudge 
like  slaves  for  foreign  masters  for  years  to 
come,  to  the  great  detriment  of  Germany. 
You  will  thus  do  the  same  harm  as  a  num- 
ber  of  our   representatives   at   Spa,   who 

121 


HUGO  STINNES 

through  racial  bias,  broke  down  German 
resistance  against  degrading  demands.  I 
hope  that  you  will  see  to  it  that  my  reply 
to  your  statements  is  conspicuously  printed 
in  the  Arbeiterzeitung.    Good  luck  to  you!" 

Hugo  Stinnes  had  every  right  to  repudi- 
ate such  suspicions.  An  expert  called  in 
to  give  his  opinion  must  be  allowed  to  state 
his  case  frankly,  without  being  suspected  of 
bad  motives.  On  this  occasion,  it  is  true, 
Stinnes  exposed  himself  by  ascribing  mo- 
tives inspired  by  racial  bias  to  other  ex- 
perts who  did  not  share  his  point  of  view. 
Perhaps  he  wanted  to  defend  himself  against 
the  impression  which  a  French  newspaper 
had  created,  by  describing  Stinnes  as  hav- 
ing a  Semitic  appearance.  On  this  occasion 
Stinnes  had  been  characterized  as  "half  a 
professor,  half  a  rabbi."  In  any  case, 
Stinnes'  attack  upon  his  associates  at  Spa 
was  most  unfortunate. 

Since  Spa,  Stinnes  has  been  especially 
down  on  politicians.  After  the  negotia- 
tions at  the  London  Conference,  he  made  a 

122 


HUGO  STINNES 

sharp  attack  upon  the  German  conduct  of 
the  negotiations,  in  the  Committee  on 
Foreign  Affairs  of  the  German  parhament. 
He  reproached  the  Cabinet  for  having  a 
foreign  poHcy  that  was  without  any  guid- 
ing idea  or  fixed  plan.  Lately,  an  interview 
of  Stinnes  has  been  republished,  which  he 
is  supposed  to  have  given  to  a  foreign 
correspondent. 

"We  are  merely  losing  time  through  the 
chatter  of  politicians  who  are  wound  up 
like  automatons  by  parliament  and  the 
newspapers.  What  we  need  is  a  conference 
of  business  men  who  can  talk  to  each  other 
without  hate.  There  must  be  no  more  con- 
ferences at  which  everybody  lays  down  his 
revolver  at  his  side.  This  sick  world  can 
only  be  saved  by  a  consultation  of  a  few 
physicians  behind  closed  doors.  It  would 
be  insane  on  the  part  of  Germany  to  de- 
clare its  willingness  to  pay  even  the  in- 
terest on  a  loan  of  50,000,000,000  marks. 
If  the  Allies  are  figuring  on  any  such  sums, 

they  are  going  to  have  another  disappoint- 

123 


HUGO  STINNES 

ment.  France  could  have  had  material 
and  labor  for  construction  two  years  ago, 
and  no  German  would  have  refused  to  de- 
liver them.  France,  however,  was  not 
really  interested  in  reparation,  but  was 
seeking  to  humiliate  Germany.  At  the 
present  moment  there  are  only  two  kinds  of 
countries  in  the  world — those  which  can 
buy  raw  materials  because  of  the  state  of 
exchange,  and  those  which  can  not  do  this. 
Both  are  bound  to  perish  unless  some  form 
of  cooperation  can  be  agreed  upon.  Money 
is  to  be  found,  but  only  by  giving  the  world 
an  example  of  perfect  cooperation.  Every 
business  man  knows  that  money  is  to  be 
had,  only  the  politicians  do  not  seem  to 
know  it.  I  am  trying  to  save  my  country 
from  destruction,  and  at  the  same  time  save 
the  other  countries." 

This  interview  is  without  doubt  essen- 
tially correct.  For  this  is  the  way  Stinnes 
thinks  and  speaks.  He  is  always  terse  and 
sure  of  himself,  and  sees  things  in  a  large 

way,  though  he  is  sometimes  a  little  reck- 

124 


HUGO   STINNES 

less.  It  Is  certain  that  Stinnes  will  make 
use  of  his  whole  organizing  power  to  solve 
European  problems  when  the  time  comes. 
It  is  not  like  him  to  stand  aside  and  sulk. 

As  a  party  man,  Stinnes  belongs  to  the 
German  People's  Party  (Volkspartei).  The 
party  seems  to  have  entertained  the  hope 
that  this  powerful  trust  magnate  would 
make  a  strong  foundation  for  a  political 
platform.  These  expectations  have  not 
been  realized.  Hugo  Stinnes  seems  to  have 
no  desire  to  substitute  a  form  of  narrowly 
conceived  and  unprofitable  party  politics 
for  his  industrial  activity. 

Stinnes  has  lately  been  severely  taken 
to  task  for  launching  three  ships  which 
were  christened  with  somewhat  opprobri- 
ous names.  To  call  these  three  ships 
'^Hindenburg/'  "Tirpitz,"  and  "Luden- 
dorff,"  was  looked  upon  as  a  provocation, 
though  it  is  not  likely  that  this  idea  ever 
entered  his  mind.  For  the  construction  of 
these   ships   had  been  begun   at   a  period 

when  these  three  names  still  sounded  differ- 

125 


HUGO  STINNES 

ently  to  Germans,  than  they  now  do.  The 
three  men  in  question  had  probably  agreed 
to  act  as  godfathers  for  the  ships  some  time 
ago.  It  would  have  been  very  surprising 
if  a  man  like  Stinnes  had  allowed  any  psy- 
chological or  tactical  considerations  to  in- 
fluence him  to  change  the  names  of  the 
ships  at  the  last  moment. 


CHAPTER  X 

STINNES  AND  THE   SOCIALIZATION  OF  INDUS- 
TRIES 

Coal  and  iron  are  the  foundations  of  Ger- 
man industry.  He  who  controls  them  con- 
trols the  smallest  business.  By  producing, 
manufacturing,  and  exporting  them,  Ger- 
many can  exchange  goods  with  the  indus- 
tries of  the  world;  she  can  satisfy  her  own 
needs  and  make  enough  profit  to  increase 
and  improve  the  supply;  she  can  put  her 
factories  into  more  and  more  perfect  con- 
dition. Mr.  Vogler,  one  of  the  directors  of 
the  Stinnes  Trust,  is  quite  right  when  he 
says:  "With  us  the  potato  has  long  ago  be- 
come a  product  of  coal." 

For  this  reason  the  question  of  creating 
new  economic  systems  always  involves  the 

control  of  coal  and  iron.    Newspapers,  pub- 

127 


HUGO   STINNES 

lie  meetings,  and  commissions  have  long 
been  engrossed  in  plans  for  the  develop- 
ment of  these  new  systems.  Germany  was 
the  first  country  to  create  a  State  Economic 
Council,  a  parliamentary  institution  cre- 
ated for  the  purpose  of  taking  economic 
questions  out  of  the  hands  of  politically 
divided  parties,  and  giving  them  to  com- 
petent representatives  of  the  various  trades 
and  professions  to  evolve  some  suitable 
working  basis. 

In  the  State  Economic  Council,  repre- 
sentatives of  every  occupation  come  to- 
gether for  practical  work  on  these  economic 
questions.  After  the  events  at  Spa  in  1920, 
the  question  of  socializing  the  mines  was 
exhaustively  discussed.  The  records  of  the 
proceedings  read  like  an  exciting  drama 
which  shows  the  conflict  of  opinions  and 
interests  on  a  broad  stage,  not  without  an 
occasional  bit  of  satire. 

In  the  debate  over  the  socialization  of 

the  mines,  there  was  found  to  be  a  sharp 

conflict   of  opinion.      Hugo   Stinnes,   who 

128 


HUGO   STINNES 

belongs  to  the  State  Economic  Council, 
took  an  active  part  in  the  discussions. 
When  the  first  negotiations  failed  to  estab- 
lish a  common  basis,  the  so-called  **  Com- 
mittee of  Understanding''  was  formed, 
which  proceeded  from  Berlin  to  Essen,  into 
the  heart  of  the  coal  district,  in  order  to 
arrive  at  some  practical  results.  Besides 
Stinnes  and  Vogler,  this  committee  in- 
cluded a  number  of  other  employers  and 
employees  from  the  various  branches  of 
the  coal  industry,  and  the  series  of  fac- 
tories belonging  to  the  next  stage  of  manu- 
facturing. This  meeting  at  Essen  resulted 
in  an  expert's  memorandum  which  was 
essentially  the  work  of  Stinnes.  The  other 
large  industrial  leaders  of  German  indus- 
tries subscribe  to  the  collectivist  point  of 
view  contained  in  this  memorandum.  As 
we  cannot  digress  too  far  into  the  details  of 
these  proposals,  we  shall  limit  ourselves  to 
elaborating  upon  the  two  most  important 
ones. 

The  memorandum  declares  itself  in  favor 

129 


HUGO  STINNES 

of  creating  vertical  consolidations  of  the 
industry.  The  object  is  to  utilize  the  raw 
materials  to  the  greatest  possible  extent, 
and  to  manufacture  them  into  finished 
products  as  efficiently  as  possible.  When 
these  various  vertical  combinations  within 
the  industry  have  brought  about  the  great- 
est possible  economic  concentration,  they 
are  to  be  organized  in  relation  to  each 
other  on  the  horizontal  system.  The  whole 
industry  will  then  be  trustified  both  ver- 
tically and  horizontally  into  a  collective 
unit.  This  will  ensure  the  maximum  serv- 
ice, and  will  thus  fulfill  one  of  the  main 
demands  of  socialistic  organization.  Ac- 
cording to  Stinnes,  trustification  and  social- 
ization run  parallel,  and  do  not  have  to 
intersect  each  other.  The  second  proposal 
is  to  create  industrial  provinces.  The  eco- 
nomic field  is  to  be  divided,  not  according 
to  geographical  and  political  relations,  but 
strictly  according  to  a  practical  economic 
point  of  view.  Within  every  uniform  dis- 
trict  there  will  be  a   combination  of  all 

130 


HUGO  STINNES 

the  branches  of  industry,  and  a  joint  regu- 
lation of  power  production,  raw  material 
output,  and  manufacturing,  together  with 
the  necessary  transportation  facilities.  In 
forming  these  industrial  provinces,  Stinnes 
is  developing  a  plan  which  he  had  already 
tried  to  put  into  practice  before  the  war. 
Both  his  mining  establishments  in  the  Ruhr 
district,  and  his  development  of  the  elec- 
trical business,  had  been  planned  with  the 
idea  of  creating  a  uniform  industrial  dis- 
trict. To  carry  out  this  form  of  collec- 
tivism, Stinnes  also  proposes  to  have  the 
employees  hold  shares  in  the  industry. 

These  lines  of  development  have  been 
evolved  from  practical  experience,  and  fol- 
low out  the  purpose  which  Stinnes  had  in 
mind  in  establishing  his  enterprises  and 
consolidating  the  various  branches  into  his 
Trust.  The  importance  of  these  consoli- 
dations for  the  economic  development  of 
Germany  is  indisputable.  The  proposal 
of  minor  stock  participation  is  not  essen- 
tial  to   the   development   of  collectivism, 

131 


HUGO  STINNES 

and  may  even  become  an  impediment.  The 
participation  of  the  individual  employee 
in  the  enterprises  would  merely  strengthen 
economic  individualism.  Other  business 
men  demanded  the  participation  of  the 
employees  as  a  form  of  collectivism. 
Socialization  itself  has  thus  far  made  little 
progress.  The  great  unknown  quantities, 
which  the  unsolved  reparations  problem 
has  called  forth,  must  first  be  eliminated 
from  world  economics.  No  amount  of 
negotiation  so  far  has  even  succeeded  in 
reducing  these  quantities  to  practical  di- 
mensions. 

Until  this  is  done  it  is  not  very  likely 
that  a  transformation  of  the  present-day 
economic  system  can  be  accomplished 
through  legislation.  In  this  connection,  it 
is  interesting  to  hear  the  opinion  of  French 
Socialists  about  the  economic  system  which 
Stinnes  has  created.  A  short  time  ago 
Le  Peuple  pointed  out  how  this  concentra- 
tion had  cheapened  production  and  avoided 
the  waste  of  raw  material,  and  referred  to 

132 


HUGO  STINNES 

this  form  of  organization  as  "a  step  which 
France  might  well  imitate."  French  in- 
dustry, this  newspaper  continued,  had  found 
nothing  better  to  do  than  to  raise  the 
tariff.  This  merely  stunted  business  initi- 
ative and  diminished  competition  in  world 
economics,  whereas  these  German  concen- 
trations had  not  only  proved  that  produc- 
tion methods  could  be  improved  but  had 
shown  how  such  improvements  could  be 
made. 


CHAPTER  XI 

THE    SIGNIFICANCE    OF    STINNES    IN    GERMAN 
ECONOMIC   DEVELOPMENT 

There  is  no  doubt  about  the  strength  of 
Stinnes'  personality.  But  it  is  equally  cer- 
tain that  from  an  economic  point  of  view 
he  is  rapidly  growing  beyond  a  mere  per- 
sonality:  he  is  becoming  his  own  work. 

The  Stinnes  Trust  serves  as  a  model  il- 
lustration ot  German  trustification.  This 
differs  in  many  ways  from  the  well-known 
American  trust,  in  respect  to  its  ori- 
gins, its  development,  and  its  results.  The 
untapped  natural  resources  of  America  of- 
fered unprecedented  opportunities  for  profit 
to  the  trusts.  In  Germany,  on  the  other 
hand,  there  were  already  large  numbers  of 
independent  business  men  who  had  sprung 

134 


HUGO  STINNES 

up  as  a  result  of  the  division  and  utilization 
of  the  country's  deposits  of  raw  materials, 
and  the  advanced  technical  development; 
so  that  a  trust  could  not  be  formed  except 
through  a  combination  of  individual  daring 
and  an  extraordinary  gift  for  organization. 
American  trust  builders  also  have  frequently 
made  clever  use  of  the  stock  exchange  opera- 
tions, in  order  to  gain  control  of  various 
enterprises.  Large  scale  speculations  of 
this  sort  have  been  rare  occurrences  in  Ger- 
many. It  is  only  quite  recently  that  the 
stock  exchanges  of  Berlin  and  Vienna  have 
witnessed  such  sensational  operations.  They 
will  cease  as  soon  as  the  exchange  has  been 
stabilized. 

The  German  concentration  movement 
did  not  take  place  primarily  through  finan- 
cial operations,  but  through  logical  con- 
solidations of  enterprises  that  were  at  the 
same  stage  of  manufacture,  or  were  engaged 
in  similar  manufacturing  processes.  Such 
consolidations  offered  great  advantages  in 
the  running  of  the  business,  which  did  not 
10  135 


HUGO  STINNES 

exist  in  the  case  of  isolated  enterprises. 
They  led  to  economy  and  skill  in  the  pur- 
chase of  raw  materials,  and  where  they 
were  built  up  on  the  basis  of  their  own  raw 
materials,  this  feature  frequently  put  them 
in  the  favorable  position  of  being  able  to 
procure  their  material  without  expensive 
middle-men's  costs,  and  without  time-rob- 
bing and  costly  transportation.  They  could 
also  regulate  the  production  of  raw  ma- 
terials according  to  whatever  standard  of 
quality  they  required. 

The  special  forms  of  industrial  organiza- 
tions peculiar  to  mining  were  to  the  advan- 
tage of  factories  that  handled  several  proc- 
esses at  different  stages.  The  protracted 
dissensions  in  the  Rhine- Westphalian  Coal 
Syndicate  had  resulted  from  the  fact  that 
a  large  number  of  mining  industries,  as 
well  as  factories  involving  several  processes, 
were  members  of  the  same  syndicates  and 
cartels.  The  cartel  form  of  business  or- 
ganization will  probably  disappear  entirely. 

An  essential  difference  between  German 

136 


HUGO  STINNES 

and  American  trusts  also  lies  in  the  fact, 
that  in  America  the  domination  of  the  trust 
in  most  cases  led  to  the  complete  control  of 
an  entire  industrial  field.  Thus  the  all- 
powerful  Standard  Oil  Company,  whose 
history  is  associated  with  the  name  of 
Rockefeller,  completely  dominated  the 
American  oil  industry  within  the  short 
space  of  ten  years  after  it  had  absorbed 
39  competing  companies.  At  one  time  it 
transported  and  distributed  95%  of  the 
entire  American  production.  Germany  had 
no  such  example  of  monopoly  because  a 
number  of  equally  powerful  trusts  grew  up 
within  the  same  branch  of  industry.  When 
the  period  of  consolidation  approached, 
German  industry  had  numerous  large  enter- 
prises with  a  highly  developed  individu- 
ality. At  present,  the  mining  industry 
alone  includes  a  number  of  large  firms.  So 
far  no  single  trust  dominates.  As  a  result 
the  head  of  every  trust  is  stimulated  to 
make  a  maximum  effort.  No  mining  trust 
can  afford  to  rely  upon  its  powerful  posi- 

137 


HUGO  STINNES 

tion,  and  to  let  up  in  its  effort  to  perfect 
its  equipment  and  to  increase  its  produc- 
tion. This  continually  forces  German  trusts 
to  do  everything  in  their  power  to  try  to 
cheapen  production  costs  and  to  extract 
the  maximum  effort  from  their  workmen. 

Another  trait  of  the  German  trusts  is 
the  principle  of  federation  basis  on  which 
they  are  organized,  corresponding  to  the 
characteristics  of  the  German  people.  As 
the  Stinnes  Trust  shows,  decentralization 
is  the  very  thing  aimed  at,  so  as  to  preserve 
and  increase  the  independence  of  the  in- 
dividual enterprises  and  the  pride  of  each 
director  in  his  responsibility,  as  well  as  to 
avoid  stagnation  in  the  office  management 
and  in  the  shop. 

Germany  to-day  shows  the  most  diversi- 
fied forms  of  consolidations  in  every  field. 
But  they  all  have  the  same  object  in  com- 
mon, namely,  to  organize  industry  on  a 
more  rational  basis.  This  is  essential  in 
order  to  keep  Germany  alive.  The  fact 
that  this  process  is  taking  place  from  within 

138 


HUGO  STINNES 

is  a  sign  of  inner  vitality.  To  what  this 
development  will  lead  later  on,  cannot  yet 
be  foreseen.  Theories  differ  in  regard  to 
the  efficiency  of  these  concentrations.  The 
dispute  between  the  partisans  of  these 
theories  frequently  takes  violent  forms. 
But  in  the  meantime  the  development  goes 
steadily  on.  Germany  must  of  course  pre- 
vent unhealthy  excrescences  of  this  de- 
velopment. But  the  development  itself  is 
bound  to  take  place. 

The  importance  of  German  trusts  for 
the  future  of  Germany  is  certainly  very 
great.  So-called  normal  economic  condi- 
tions, in  the  period  before  the  war,  now 
seem  almost  mediaeval  and  provincial.  The 
development  is  taking  place  with  enormous 
rapidity.  The  pressure  of  conditions  from 
without,  the  actual  or  threatened  loss  of 
vital  industrial  sections,  and  the  prohibi- 
tion of  export  and  import,  would  necessarily 
have  destroyed  Germany  if  unsuspected 
forces  had  not  been  liberated  and  been 
made   to   unfold   from   within.     Germany 

139 


HUGO   STINNES 

will  become  a  sparsely  settled  agricultural 
state  unless  the  formation  of  new  kinds  of 
economic  organization  can  bring  about 
greater,  better,  and  cheaper  production. 
Trusts  induce  and  facilitate  the  growth  of 
these  new  economic  organizations.  It  is 
worth  while  to  observe  the  effects  of  trusti- 
fication in  the  case  of  the  Stinnes  Trust. 

The  consolidation  of  the  Gelsenkirchen 
Mining  Company  Inc.  with  the  German- 
Luxemburg  Mining  &  Smelting  Company 
and  the  Bochum  Company,  combines  a 
large  number  of  similar  plants  engaged  in 
the  production  of  coal,  iron-ore,  limestone, 
and  dolomite.  These  raw  materials  are  ex- 
tracted not  only  for  the  factories  belonging 
to  the  trust,  but  to  a  considerable  extent 
for  outside  factories  as  well.  This  com- 
bination makes  it  possible  to  employ  cheaper 
and  better  methods  of  extraction  because 
the  joint  management  eliminates  competi- 
tion, and  facilitates  a  better  organized  plan 
of  distribution.    The  expenses  of  the  Trust 

are  also  reduced  through  the  manufacture 

140 


HUGO  STINNES 

of  its  own  raw  materials.  The  factories  are 
thereby  put  in  a  position  to  invest  much 
more  money  in  new  enterprises  where  the 
resuhs  may  be  doubtful,  than  isolated 
establishments  which  operate  much  closer 
to  the  profit  and  loss  margin.  Innovations 
of  a  technical  nature  can  also  be  introduced 
with  much  less  risk. 

The  by-products  and  intermediary  prod- 
ucts of  the  mining  industry  can  be  utilized 
to  the  greatest  advantage.  Here  also  the 
history  of  the  Stinnes  Trust  shows  that  a 
number  of  technical  innovations  were  made 
possible  only  by  distributing  the  risk  of  the 
experiment  over  the  individual  factories. 
By-products  such  as  coke  and  lime  can  be 
manufactured  in  the  company's  own  fac- 
tories in  any  grade  or  quality  desired.  The 
Trust  can  obtain  all  the  necessary  materials 
for  the  production  of  pig  iron  from  its  own 
plants,  and  the  smelting  takes  place  in  its 
own  establishments.  Steel  of  every  grade, 
cast-iron,  blast  furnace  cement,  and  slag 

stones,  are  all  produced  according  to  the 

141 


HUGO  STINNES 

needs  of  the  factories  at  the  next  stages  of 
manufacture. 

Semi-manufactured  products  of  every 
form  and  quahty  are  successively  produced 
by  a  chain  of  related  factories.  The  estab- 
lishments at  Gelsenkirchen  produce  rail- 
road material,  bar  iron,  tin,  and  tubing; 
the  Bochum  Company  manufactures  rail- 
road material,  forged  iron,  bar  iron,  and 
cast  iron.  The  Brüninghaus  factories  pro- 
duce crude  forged  iron  and  bar  iron;  the 
former  works  at  Thomee  produce  bar  iron 
and  rolled  steel  wire.  The  former  inde- 
pendent works  at  Berg  manufacture  bar 
iron,  various  forms  of  tin,  wire,  and  tubing; 
the  German-Luxemburg  Mining  &  Smelting 
Company  manufactures  railroad  material, 
forged  iron,  cast-iron,  tins  and  wires.  The 
affiliated  factories  of  the  Siemens  Company 
also  produce  bar  iron  and  wire. 

The  finished  products  of  the  German- 
Luxemburg  Company  include  all  kinds  of 
tools,    screws    and    rivets,    springs,    forged 

parts,   switches,   railroad  and   bridge  con- 

142 


HUGO  STINNES 

struction  material,  cranes,  cables,  railroad 
and  street  cars,  freight  cars,  machines  and 
ships.  The  Company  obtains  all  its  neces- 
sary materials  for  these  manufacturing 
processes  from  the  series  of  factories  en- 
gaged in  the  production  of  intermediary 
products.  The  Bochum  Company  depends 
upon  previous  production  stages  of  the  in- 
dustry for  its  manufacture  of  forgings  and 
railroad  material. 

This  foundation  of  raw  material,  semi- 
and  finished  product,  serves  the  Siemens 
Company  for  the  manufacture  of  the  most 
varied  articles.  These  include:  generators, 
motors,  transformers,  switchboards,  ma- 
terial for  installations,  cables  and  conduits, 
telegraph  and  telephone  apparatus,  signal 
apparatus,  measuring  instruments,  electro- 
medial  apparatus,  hydrometers,  railroad 
safety  devices,  trucks  and  automobiles, 
artificial  coal,  porcelain  and  paper  for  tech- 
nical purposes,  incandescent  lamps,  elec- 
trical distributing  stations,  electrical  equip- 
ment for  industrial  power  plants,  for  elec- 
ts 


HUGO   STINNES 

trical  transportation,  and  for  chemical  in- 
dustries; long  distance  telephone  apparatus 
and  transmission  equipment,  signal  and 
switchboard  equipment,  and  underground 
and  hydraulic  building  material. 

Beginning  at  the  bottom  of  the  scale, 
every  stage  of  manufacture  is  undertaken 
in  relation  to  the  stage  next  above,  so  that 
the  raw  material  is  gradually  transformed 
into  a  finished  product  of  the  best  possible 
quality.  Whenever  changes  in  the  finished 
product  are  called  for,  suitably  equipped 
factories  can  be  installed  at  any  of  the  pre- 
liminary stages  of  manufacture. 

The  divisions  in  this  system  are  not 
rigid.  Horizontal  and  vertical  combina- 
tions parallel  and  intersect  each  other. 
Many  industries  are  divided  vertically  or 
horizontally  within  themselves,  and  some 
are  connected  with  others  both  horizon- 
tally and  vertically.  Every  stage  of  manu- 
facture, besides  having  its  place  in  the  pro- 
duction scale  as  a  whole,  is  itself  minutely 

organized.     This  rational  systematizing  of 

144 


HUGO   STINNES 

factories  will  undoubtedly  be  developed 
still  further.  This  combination  is  of  especial 
importance  in  the  case  of  factories  that 
are  connected  in  a  series.  The  horizontal 
division,  which  economic  experts  have  been 
insisting  upon,  is  therefore  already  fore- 
shadowed in  the  Stinnes  Trust,  and  will 
probably  be  further  developed. 

Stinnes  is  generally  regarded  as  the 
strongest  exponent  of  the  vertical  trust. 
The  most  recent  developments  show  that 
even  those  industrial  leaders  who  formerly 
were  the  strongest  opponents  of  vertical 
trusts  can  no  longer  get  along  without  the 
expansion  of  their  enterprises  both  upward 
and  downward  in  the  scale  of  production. 
A  combination  of  the  vertical  and  the 
horizontal  systems  will  probably  take  place 
to  a  very  great  extent  in  the  near  future. 

The  Stinnes  Trust  has  been  ver;^  much 
attacked.  In  most  cases  the  attack  is  not 
against  Stinnes  himself  but  against  the  form 
of  trustification,  so  that  it  also  applies  to 
other  large  trusts  which  are  being  formed 

HS 


HUGO  STINNES 

in  Germany.  The  point  is  being  made  that 
the  development  of  these  trusts  is  not 
organic  but  is  due  to  the  tremendous  pres- 
sure of  external  circumstances.  In  case  of 
a  return  to  a  period  of  normal  economic 
activity  in  the  future,  it  is  considered  very 
dangerous  to  have  these  trusts  absorb  a 
large  number  of  major  and  minor  indus- 
tries which  they  will  no  longer  be  able  to 
utilize  when  conditions  are  stablized  again. 
But  after  the  factories  are  either  aban- 
doned or  closed  down,  it  will  still  be  nec- 
essary to  pay  off  both  interest  and  prin- 
cipal on  the  large  amounts  of  capital  in- 
vested. This  necessity  will  form  an  un- 
desirable liability  which  must  be  charged 
against  prices.  The  same  reasoning  ap- 
plies to  the  overpayments  which  are  often 
being  made  to-day  in  acquiring  new  prop- 
erties. These  liabilities  will  prevent  price 
reduction,  and  will  finally  be  passed  on  to 
the  consumer,  so  that  the  people  as  a  whole 
will  suffer  economic  harm. 

It  is  also  claimed  that  there  is  great 

146 


HUGO  STINNES 

danger  of  the  owners  of  these  powerful 
trusts  misusing  their  influence  over  society 
and  the  state.  It  may  become  especially 
difficult  to  regulate  the  production  of  in- 
dividual countries  in  the  interest  of  inter- 
national economic  understanding,  if  these 
countries  contain  powerful,  independent 
pyramids  which  stand  outside  of  the 
commonwealth. 

Finally  it  is  argued  that  these  trusts 
make  it  impossible  for  important  smaller 
'  industries  to  remain  independent,  and  that 
they  check  the  initiative  of  the  masses. 

These  misgivings  are  not  entirely  un- 
justified. In  addition,  the  trustification 
movement  has  thus  far  failed  to  give  one 
other  necessary  guarantee.  Trusts  will,  it 
is  true,  lead  to  the  greatest  possible  ration- 
alization of  economics,  but  it  has  not  yet 
been  shown  that  these  factory  systems, 
however  technically  perfect  they  may  be, 
are  working  towards  a  true  collectivism. 
Of  what  use  is  it  to  the  general  public,  for 
instance,  to  have  the  best  telephone  system, 

147 


HUGO   STINNES 

if  such  necessities  as  houses,  clothes,  and  food 
cannot  be  procured  in  sufficient  quantities, 
or  only  at  exorbitant  prices  ?  And  it  is  also 
true  that,  up  to  now,  every  advance  towards 
a  better  supply  of  these  necessities  is  made 
retroactive  through  the  fact  that  increased 
satisfaction  constantly  creates  new  wants. 
Thus,  the  economic  pressure  persists  even 
when  it  is  possible  to  satisfy  all  wants. 

As  regards  the  relative  merits  of  vertical 
or  horizontal  concentration,  this  at  least 
seems  to  be  certain:  Under  the  desperate 
conditions  of  present  day  German  indus- 
try, the  vertical  trust  is  the  most  important 
for  the  near  future.  The  merit  of  the  hori- 
zontal system  lies  in  its  internal  results. 
This  system  may  be  compared  to  a  com- 
munity with  an  economic  system  which 
allows  the  most  suitable  distribution  of 
labor  and  avoids  every  form  of  industrial 
friction  and  waste  of  material,  while  at  the 
same  time  enjoying  unrestricted  relations 
with  the  outer  world.  But  Germany  to- 
day cannot  revive  her  industry  by  satisfy- 

148 


HUGO  STINNES 

ing,  however  perfectly  and  smoothly,  only 
her  own  wants.  She  must  have  free  inter- 
course with  the  world.  The  German  eco- 
nomic organism  is  crippled  and  will  not  be 
able  to  maintain  itself  through  the  coming 
periods  of  economic  crises  and  struggles 
for  supremacy,  unless  it  can  secure  points 
of  support  and  sources  of  food  supply  out- 
side of  its  own  borders.  Only  a  vertical 
trust  like  that  of  Stinnes  can  create  points 
of  support  for  itself  in  the  endangered 
districts  and  in  foreign  countries.  If  ten 
similar  establishments,  operating  at  the 
same  stage  of  manufacture,  join  with  an 
eleventh  similar  establishment  in  a  foreign 
country,  they  cannot  accomplish  their  eco- 
nomic function  through  the  agency  of  this 
one  establishment,  in  times  of  political  and 
economic  uncertainty.  But  a  trust  that  is 
linked  with  the  production  of  raw  materi- 
als and  is  sure  of  disposing  of  its  goods  will 
be  able  to  retain  its  strength  in  a  crisis, 
and  will  even  be  able  to  engage  in  new  forms 

of  activity  in  the  face  of  powerful  obstacles. 

149 


HUGO  STINNES 

If  we  direct  our  attention  to  the  anchor- 
ages of  the  Stinnes  trust,  such  as  Rhine- 
land-Westphaha,  Hamburg,  Berlin,  Bava- 
ria, East  Prussia,  and  German  Austria, 
and  follow  out  all  their  foreign  connections, 
we  shall  find  that  they  offer  valuable  guar- 
antees of  their  ability  to  function  even  in 
periods  of  political  and  economic  upheavals. 
If  the  German  commonwealth  succeeds  in 
organically  incorporating  this  powerful  trust 
into  its  own  economic  structure,  Hugo 
Stinnes  will  be  one  of  the  commonwealth's 
strongest  pillars. 


*9> 


m^^mno 


14  DAY  USE 

RETURN  TO  DESK  FROM  WHICH  BORROWED 

LOAN  DEPT. 

This  book  is  due  on  the  last  date  stamped  below,  or 

on  the  date  to  which  renewed. 

Renewed  books  are  subject  to  immediate  recall. 


FEB  2  8  1966     5 


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MAy2§  196818 


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OCT    3  1975 


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4    1S79 


LD  21A-60m-10,'65 


General  Library 
University  of  California 


CDSlDtD3753 


5rjK*va?r.' 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


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